Round Up of Arbitration Decisions from the English …...Important Arbitration Decisions from the English Court 2018/19 D. Miscellaneous Key Cases 1. Progas Energy Ltd v The Islamic

Important Arbitration Decisions from the English Court 2018/19

Round Up of Arbitration Decisions from the English Courts

2018/2019

Introduction

Important Arbitration Decisions

from the English Court 2018/19

The Commercial and Appeal Courts in London have in recent years

seen a growth in cases relating to the Arbitration Act 1996. There were

a significant number of reported decisions in 2018 and the first quarter

of 2019.

In this Round Up we have tried to capture and summarise the important

cases that have emerged, and we have grouped these together in order

to reflect common themes and sections of the Arbitration Act 1996.

Some of the cases resonate across the International Arbitration

community, notably when the Court has considered a section 68

challenge to an arbitration award or a section 24 application to remove

an arbitrator based on justifiable doubts as to impartiality (e.g. the

Halliburton Company v Chubb Bermuda Insurance Ltd & Ors [2018]

EWCA Civ 817 and Dera Commercial Estate v Derya Inc [2018] EWHC

1673 cases).

The IBA Guidelines on Conflicts of Interest in International Arbitration

have been considered, and sometimes criticised in recent years by the

English Court. They were again referred to in Halliburton when

considering contrasting approaches to an arbitrator’s obligation of

disclosure.

What remains clear from the cases last year is that successfully

challenging an award under section 68 for serious irregularity, or

appealing a point of law under section 69, remain the exception rather

than the norm. In dealing with arbitration cases the English Commercial

Court continues to be guided by the maxim “maximum support,

minimum interference “. This is no better illustrated than in the 2019

decision in ArcelorMittal USA LLC v EssarSteel Ltd [2019] EWHC 724 in

which the Court supported the enforcement of an arbitration award by

confirming a worldwide freezing injunction against a Defendant

company with little connection to the UK.

References to “sections” in this Round Up refer to relevant section of

the Arbitration Act 1996 unless otherwise stated.

The summaries contained herein are not legal advice. Specialist legal

advice should be taken in relation to specific circumstances or

arbitration matters.

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Contents



I. Decisions from the English Court 2018/2019

A. Challenges and Appeals (sections 67,68,69)

Key Cases

1. A v B [2018] EWHC 1370 (Comm) (13 April 2018)

2. Reliance Industries Ltd & Anor v The Union of India [2018] EWHC 822 (Comm) (16 April 2018)

3. Dera Commercial Estate v Derya Inc [2018] EWHC 1673 (Comm)(13 July 2018)

4. RJ & Anor v HB [2018] EWHC 2833 (Comm) (26 October 2018)

5. Merthyr (South Wales) Ltd v Cwmbargoed Estates Ltd & Anor [2019] EWHC 704 (Ch)

(25 March 2019)

6. Eleni Shipping Limited v Transgrain Shipping B.V. [2019] EWHC 910 (Comm) (10 April 2019)

7. Equitas Insurance Ltd v Municipal Insurance Ltd [2019] EWCA Civ 718 (17 April 2019)

Other Cases

B. Enforcement

Key Cases

1. RBRG Trading (UK) Ltd v Sinocore International Co Ltd [2018] EWCA Civ 838 (23 April 2018)

2. Eastern European Engineering Ltd v Vijay Construction (Proprietary) Ltd [2018] EWHC 1539

(Comm) (20 June 2018)

3. Micula & Ors v Romania (Rev 1) [2018] EWCA Civ 1801 (27 July 2018)

4. Stati & Ors v The Republic of Kazakhstan [2018] EWCA Civ 1896 (10 August 2018)

5. ArcelorMittal USA LLC v EssarSteel Ltd [2019] EWHC 724 (Comm) (25 March 2019)

Other Cases

C. Anti-suit Injunction

Key Cases

1. Michael Wilson & Partners Ltd v Emmott [2018] EWCA Civ 51 (31 January 2018)

2. Nori Holding Ltd & Ors v Public Joint-Stock Company 'Bank Otkritie Financial Corporation' (Rev 1)

[2018] EWHC 1343 (Comm) (06 June 2018)

3. Mobile Telecommunications Co KSC v HRH Prince Hussam Bin Abdulaziz Au Saud [2018] EWHC

3749 (Comm) (10 August 2018)

Other Cases

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D. Miscellaneous

Key Cases

1. Progas Energy Ltd v The Islamic Republic of Pakistan (Rev 1) [2018] EWHC 209 (Comm)

(09 February 2018)

2. Allianz Insurance Plc & Anor v Tonicstar Ltd [2018] EWCA Civ 434 (13 March 2018)

3. Daewoo Shipbuilding & Marine Engineering Company Ltd v Songa Offshore Equinox Ltd & Anor

[2018] EWHC 538 (Comm) (16 March 2018)

4. Halliburton Company v Chubb Bermuda Insurance Ltd & Ors [2018] EWCA Civ 817 (19 April 2018)

5. SCM Financial Overseas Ltd v Raga Establishment Ltd (Rev 1) [2018] EWHC 1008 (Comm) (03 May

2018)

6. Goodwood Investments Holdings Inc v Thyssenkrupp Industrial Solutions AG (M/Y PALLADIUM)

[2018] EWHC 1056 (Comm) (09 May 2018)

7. Haven Insurance Company Ltd v EUI Ltd (t/a Elephant Insurance) [2018] EWCA Civ 2494

(08 November 2018)

8. The Chartered Institute of Arbitrators v B & Ors [2019] EWHC 460 (Comm) (07 March 2019)

Other Cases

II. Arbitration Act 1996 - Extracts

Section 9 - Section 9 - Stay of legal proceedings

Section 12 - Power of court to extend time for beginning arbitral proceedings

Section 24 - Power of court to remove arbitrator

Section 45 - Determination of preliminary point of law

Section 67 - Challenging the award: substantive jurisdiction

Section 68 - Challenging the award: serious irregularity

Section 69 - Appeal on a point of law

Section 70 - Challenge or appeal: supplementary provisions

Section 93 - Appointment of judges as arbitrators

Section 101 - Recognition and enforcement of awards

Section 103 - Refusal of recognition or enforcement

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I. Decisions from the English Courts



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A. Challenges and Appeals (sections 67, 68, 69)



Key cases

1. A v B [2018] EWHC 1370 (Comm) 13 April 2018)

The Court allowed a challenge under section 67 on the

basis that an ambiguous and contradictory arbitration

clause drafted in Russian provided for ad hoc

arbitration.

The initial dispute arose in relation to a Charterparty

comprising two parts which were drafted in Russian

but governed by English law. Clause J in Part I, literally

translated, provided for “Arbitration proceedings –

London international court, in accordance with the law

of Great Britain…”. Clause 24 in Part II provided for

“Arbitration. Any disagreements and disputes …

arising out of the C/P are to be resolved by arbitration

in New York or London, according to which of these

places is provided for in Part I”. In case of conflict

between Part I and Part II, the provisions of Part I

would take precedence.

The arbitrators nominated by the parties accepted their

appointments on the basis of the London Maritime

Arbitration Association Terms 2012 (LMAA). The

Defendant made no reservation as to jurisdiction or the

terms of the arbitrators’ appointment.

The Defendant subsequently challenged the Tribunal’s

jurisdiction under section 31, arguing that the

reference to an institution called “London international

court” in Clause J was meaningless and ineffective.

The Tribunal obtained comments from Russian

speaking lawyers in London and were particularly

persuaded by the fact that if the term “London Court of

International Arbitration” (LCIA) was to be translated

into Russian, the result would be very similar to what

was written in Clause J.1 The Tribunal held therefore

that it did not have jurisdiction over the dispute. The

arbitrators considered that Clause 24 did not apply as

it was in direct conflict with Clause J (the Award).

The Claimant challenged the Tribunal’s Award on the

basis that the Tribunal was wrong to consider Clause J

in isolation and that it should have looked at the proper

purposive construction of it in the light of

the contract as a whole.

Philips J allowed the challenge and held that the par-

ties had actually agreed to an ad hoc arbitration in

London. He commented that the proper approach “…at

least in the first instance, is to look at the provisions of

the contract as a whole in construing their meaning”.

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He provided the following reasons for setting aside the

Award:

i. the mechanism for appointing arbitrators in Clause

24 was inconsistent with LCIA arbitration;

ii. LCIA arbitration for maritime disputes is unusual;

iii. If the parties had intended LCIA arbitration, they

would have taken more care to ensure that the

wording specifically identified that body; and

iv. neither party objected to the appointment of

arbitrators on the basis of LMAA Terms.

Philips J commented that when construing a clause in

a foreign language where the proper translation is

doubted, the court must determine the meaning of the

clause by way of a combined process of using

evidence of translation; and the usual tools of

construction.

The purpose of this is to “reach a proper interpretation

of the meaning and effect of the contract as agreed by

the parties”.

________________________________

1 The authors note that it may be of interest to English speaking practitioners

who work regularly with Russian clients to know that arbitrazh in Russian

does not refer to “arbitration” in the English sense of the word, but in fact,

to the Russian State Commercial Court. Arbitration is usually translated as

razbiratyelstvo.

2. Reliance Industries Ltd & Anor v The Union of

India [2018] EWHC 822 (Comm) (16 April 2018)

The Court held, for the first time, that the foreign act of

state doctrine (the Doctrine) applies to arbitration as

well as litigation. The Claimants made nine challenges

to the arbitral tribunal (the Tribunal)’s Award dated 12

October 2016 (the Award), of which eight were dis-

missed. This summary will focus on Challenge 6 only.

The dispute concerned two Production Sharing

Contracts (the PSCs) by which the Union of India (the

Defendant) granted to Reliance Industries Limited and

BG Exploration and Production India Limited (the

Claimants) the exclusive right to exploit petroleum

resources in India. The petroleum was sold to two

government nominees (the Nominees). On two

occasions, the Nominees withheld payments due to

the Claimants on account of notices issued by the

Defendant pursuant to an Office Memorandum which

so instructed (the OM).

The Claimants argued that the Defendant was not

entitled to rely on the OM for two reasons: first, the OM

was not applicable to the withholdings in question (the

Applicability Argument); and second, the Defendant

did not have the constitutional power to expropriate

substantive rights under the PSCs (the Validity

Argument). The Defendant argued that the Doctrine

applied, and therefore, the withholdings were pursuant

to, and required by, the law applicable in the territory.

The Tribunal held by majority that it did not have

jurisdiction to determine the question of whether or not

the OM permitted the Defendant to withhold payment.

The Claimants appealed under section 67, it being

common ground that the concept of ‘substantive

jurisdiction’ included the question of whether or not the

subject matter of a dispute is arbitrable; and under

section 68 (2)(d), that if the Tribunal did have

jurisdiction, then it had failed to determine the issue.

The Court addressed the Claimant’s appeal in three

stages:

i. Did the issues engage the Doctrine such that they

would be non-justiciable in court?

ii. If so, are they non-arbitrable?

iii. If so, did the Defendant lose the right so as to con-

tend as a result of waiver of submission to the juris-

diction of the Tribunal?

First, the Court stated that the Doctrine as articulated

in Belhaj v Straw [2017] UKSC 3 (Belhaj) applied: the

Doctrine includes the principle that the English Court

would not have jurisdiction to determine the lawfulness

or validity of legislative or executive acts of sovereign

states which take place or take effect within the

territory of that state. The Validity Argument and the

Applicability were non-justiciable as it challenged the

validity of a legislative and executive act of a foreign

state in relation to property within its own territory.

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Second, the Court held that the claim was not

arbitrable. The Claimants argued that the Doctrine was

based on the notion of comity and was not engaged in

arbitration as an arbitral tribunal was not an organ of a

sovereign state and its determination of the validity of

the conduct of a sovereign party would not entail

calling into question the conduct of another. The Court

noted that the majority in Belhaj suggested that the

Doctrine was a hard-edged principle of English private

international law, which derived its rationale from the

concept of sovereignty which recognises the power

and right of a state to determine the property rights of

those whose property is situated within its territory.

Third, the Court held that the Defendant had not

waived its right to object simply by entering into the

arbitration agreement. The Court held that if there were

relevant applicable principles of private international

law which made some issues non-justiciable, they

formed the body of legal rules to be applied by the

Tribunal in adjudicating disputes as any other aspect of

the applicable substantive or procedural law.

Further, on the facts, the Defendant could not

reasonably have known about the Claimant’s position

giving rise to the Doctrine until it raised its jurisdictional

objection. The Claimant was therefore not permitted to

rely on section 73 (1) or Article 21 (3) of the

UNCITRAL Rules pertaining to time limits to

jurisdictional objections.

The Court stated obiter, that following Empresa

Exportadora de Azucar v Industria Azurcara Nacional

SA (The Playa Larga) [1984] 2 Lloyd’s Rep, and The

Republic of Serbia v ImageSat International NV [2009]

there was no bar in arbitration to the Doctrine being

waived, or an ad hoc submission to jurisdiction. Prima

facie the Tribunal has jurisdiction to decide anything

which the parties have asked it to decide, subject to

supra-national considerations as to whether a state

can do so inconsistently with its treaty obligations.

3. Dera Commercial Estate v Derya Inc [2018]

EWHC 1673 (Comm) (13 July 2018)

The Commercial Court considered the meaning of

“inordinate and inexcusable delay” under section 41(3)

in the Claimant’s prosecution of a claim in arbitration.

The claim concerned the shipment of 18,000 metric

tons of Indian Maize (the Cargo), owned by Dera

Commercial Estate (Dera), from India to Jordan on a

vessel (the Vessel) owned by Derya Inc (Derya). Five

bills of lading were issued, all of which made provision

for disputes to be referred to English law arbitration in

London, and which incorporated the International

Convention for the Unification of Certain Rules of Law

relating to Bills of Lading 1924 (the Hague Rules)

which provided a limitation period of one year after

delivery of the goods or the date when the goods

should have been delivered.

On arrival to Jordan, the Cargo was refused entry by

the Jordanian customs authorities. Various attempts to

appeal that decision failed. Following Dera’s

commencement of proceedings in Jordan for Cargo

damage, Derya’s insurers issued a Letter of

Undertaking (the LOU) of up to US $9m in connection

with all disputes arising under the bills of lading.

Dera’s application to fumigate the Cargo was granted

by the Jordanian authorities, but the Vessel sailed to

Turkey where the Cargo was discharged and sold

pursuant to a sale order of the Turkish Courts.

Arbitration was commenced in October 2011 with the

appointment of arbitrators by the parties. No formal

procedural steps were taken by either side in the

arbitration thereafter until March 2015 when Derya

served particulars of their claim, seeking a declaration

of non-liability and an order that the LOU be released.

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In May 2016, Derya made an application for strike out

for want of prosecution. The Tribunal struck out the

claim for inordinate and inexcusable delay under

section 41(3).

Dera obtained permission to appeal on the following

points of law:

i. whether a claim which is particularised within the six-

year limitation period can nevertheless be struck out

under section 41(3) because the parties have

contracted for a shorter limitation period;

ii. whether, in a contract subject to the Hague Rules, a

geographic deviation precludes a carrier from relying

on the one-year time bar;

iii. whether, in circumstances where the one-year time

bar is applicable, the period between (a) the time the

cause of action arises and (b) the expiry of the

contractual time limit should be considered when

assessing “inordinate” delay under section 41(3); and

iv. the proper order, burden and/or standard of proof

applicable to an assessment of “inexcusable” delay

under section 41(3).

First, the Court held that where the parties had

contracted for a shorter limitation period, the

proceedings could be struck out if that limitation period

had been exceeded. In assessing whether a delay was

‘inordinate’ it would look at the agreement of the

parties as a yardstick. The parties had agreed to a one

-year time limit for the commencement of proceedings.

There were no agreed extensions. On the facts, there

was no impediment to Dera pursuing the claim in the

arbitration at any stage from the outset.

Second, the Court held, albeit reluctantly, that it was

bound by the House of Lords decision in Hain

Steamship v Tate Lyle [1936] 41 Com Cas, 350, where

it was held that where there is geographical deviation,

the other party is entitled to retrospectively declare

itself as no longer bound by any of the contract terms.

Geographical deviation therefore precluded reliance on

the one-year time bar provided in the Hague Rules.

Third, where there are periods of procedural activity

and non-activity, the Court must assess each individual

period of delay separately and distinctly, to arrive at a

cumulative picture of overall delay. On the facts, this

approach was not appropriate as there had been no

substantial activity in the arbitration.

Fourth, the Court held that the burden of proof lay at all

times on the applicant to establish on a balance of

probabilities not only that there was inordinate but also

inexcusable delay. The commencement of Jordanian

proceedings evidenced Dera’s capability of

particularising its case as early as September 2011. In

the context of the one-year limitation period, the

Tribunal was entitled to find that a delay of three years

and nine months was inordinate and inexcusable


4. RJ & Anor v HB [2018] EWHC 2833 (Comm) (26

October 2018)

The Court set aside an ICC award (the Award) and

reverted the case back to the arbitral tribunal (the

Tribunal) for serious irregularity under section 68(2)(a).

The arbitration arose out of arrangements entered into

between HB and RJ for the latter’s expansion of his

interest in the banking sector by merging Banks 1 and

2. There was an agreement in principle that RJ would

provide US $75m in cash to enable HB to acquire a

controlling interest in Bank 2 with a view to RJ receiv-

ing a minority interest in Bank 2 following the Banks 1-

2 merger.

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For regulatory compliance reasons, the agreement in

principle could not be implemented. Therefore, a

complex transaction structure was implemented in

which, inter alia, (a) HB acquired a controlling interest

in Bank 2; (b) HB procured that Bank 2 acquire Bank 1;

and (c) RJ acquired approximately 25% of the post-

merger Bank 2 for €55m (then equivalent to US $75m),

so far as that was lawful and subject to obtaining any

necessary authorisations. HB did (a) and (b) but (c) did

not occur.

In the arbitration, HB alleged that RJ and his

investment vehicle (L Ltd) were in breach of an

obligation to obtain, or to seek to obtain, necessary

authorisation for the transaction and sought, inter alia,

declaratory relief. The Award ultimately granted,

however, held, inter alia, that “[RJ] is the beneficial

owner of the shares in [Bank 2] purchased with his or

[L Ltd’s] US $75 million” notwithstanding the fact that

the claims and cross-claims in the arbitration were

presented on the basis that the obligation to take a

shareholding in Bank 2 had not been performed.

RJ and L Ltd challenged parts of the awards on the

basis that the Tribunal granted relief that was never

sought by HB and was significantly different to

anything which the parties had contemplated. This was

done without notice to the parties thereby depriving RJ

and L Ltd of any opportunity to address the issue.

Baker J agreed and ordered that various parts of the

award should be set aside, together with the related

reasoning.

Baker J disagreed with HB’s counsel’s suggestion that

RJ and L Ltd had a reasonable opportunity to deal with

this new issue because of three brief exchanges during

oral closing submissions and the procedure the

Tribunal adopted for the preparation of the Final

Award. Baker J was “satisfied that those exchanges

did not do enough to put the parties on notice, fairly or

at all, that the Arbitrator might be contemplating such a

declaration…[the last exchange] would reasonably

have seemed just an exploration of the consequences

of ordering RJ to take [the Bank 2 shareholding]…”

Baker J was also satisfied that the procedural

irregularity caused or would cause substantial injustice

because RJ has been declared to beneficially own a

large minority stake in Bank 2 which he does not wish

to own and does not have regulatory approval for,

which could expose him to a real risk of financial

penalties from the regulator.

The arbitrator was not, however, removed from the

arbitration. Baker J commented that “section 68 does

not empower the court to remove an arbitral Tribunal,

that being reserved to section24, and that a direction

purportedly pursuant to section68, as part of a setting

aside an award, in whole or part, that matters thus

requiring a fresh determination should go to a new

Tribunal, would amount to removal of the original

Tribunal and so would require a section 24 claim”.

5. Merthyr (South Wales) Ltd v Cwmbargoed

Estates Ltd & Anor [2019] EWHC 704 (Ch) (25

March 2019)

The Court dismissed an application for leave to appeal

under section 69.

The underlying arbitral award arose out of a dispute

between the parties to a lease made concerning the

calculation of an additional rent reserved by that lease

for the price or value of minerals mined from the

demised land and subsequently sold or otherwise

disposed of (the Production Related Rent). The

arbitration clause in the lease provided for resolution of

any dispute by “an independent chartered surveyor

experienced in mineral matters to be appointed by

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agreement between the parties or failing agreement to

be appointed by the President for the time being of the

Royal Institution of Chartered Surveyors.”

In 2016, a dispute arose between

the parties as to the calculation of

the Production Related Rent. Mr

Banton, a chartered surveyor with

particular experience in dealing

with minerals and mineral

extraction was appointed. An

arbitral award (the Award) was

issued in August 2018.

Merthyr (South Wales) Ltd (the Claimant) made an

application for leave to appeal, and if leave be granted,

to appeal against the Award under section 69 on the

basis of a mistaken construction of the lease, and

under section 68 for the court to set aside the award

and/or remit matters to the arbitrator. The Claimant

argued that following Bulfracht (Cyprus) Ltd v Boneset

Shipping Co Ltd, “The MV Pamphilos” [2002] EWHC

2292 where the judge heard both the application to set

aside an award for serious irregularity under section 68

and the application to leave to appeal under section 69

at the same time as the underlying facts and legal

submissions relevant to both applications were closely

related. Matthews J rejected the argument, as the

issues raised in the two present applications were not

closely linked, and dealt only with the application for

leave to appeal under section 69, listing the section 68

challenge for a hearing.

Matthews J was satisfied that the challenge was on a

question of law arising out of an award, under section

69(1), it being trite law that construction of a private

contract involves a point of law. However, he stated

that the Court could not give

leave unless either: the arbi-

trator’s decision was

“obviously wrong”; or “the

question is one of general

public importance and the

decision of the tribunal is at

least open to serious doubt”.

Following Trustees of Edmond Stern Settlement v Levy

[2007] EWHC 1187, a construction of a one-off form of

words could not be a matter of general or public

importance. The question for the Court turned on

whether the decision was “obviously wrong”, which

requires a high standard than the test for giving

permission to appeal in ordinary litigation. Matthew J

considered the test to be satisfied in cases where ‘the

judge looks at the award and thinks “Something must

have gone seriously wrong; that just cannot be right.”

In support of the argument that the decision was

“obviously wrong” the Claimant sought to rely on the

fact that the arbitrator was not a lawyer. That ground

was dismissed. Matthews J noted that the parties to an

arbitration agreeing to arbitrate rather than litigate, and

therefore entitled to select anyone, whether qualified or

not, to carry out the arbitration. The arbitrator was a

qualified surveyor with experience of dealing with

minerals and mineral extraction, the subject of which

was at the heart of the dispute . Further, it was not

necessary that an arbitral tribunal produce a result

which was precisely correct in law as might be

produced by resort to the litigation system.

The Court held that it was not the function of the Court

to consider, at least in considering whether to grant

appeal, to go through the Claimant’s various grounds

of appeal which were submitted in detail. At the same

time, he did not have the same grasp of the factual

matrix as the arbitrator did. In such circumstances, it

could not be said that the Award was “obviously

wrong” or even just “wrong”.

“Following Trustees of Edmond

Stern Settlement v Levy [2007]

EWHC 1187, a construction of a

one-off form of words could not

be a matter of general or public

importance.”

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6. Eleni shipping Limited v Transgrain Shipping

B.V. [2019] EWHC 910 (Comm) (10 April 2019)

The Court allowed an appeal in part under section 69

on the basis that the Tribunal were wrong in law in

construing the terms of a charterparty.

The case concerned the charter of a vessel (the

Vessel) by Eleni Shipping Ltd (Eleni), to Transgrain

Shipping Ltd (Transgrain) for voyage from Ukraine to

China via the Suez Canal and the Gulf of Aden. During

the voyage the Vessel was attacked and captured by

pirates for around seven months. Eleni claimed in

arbitration for US $4.5m for the period of the seizure.

The Tribunal by a majority rejected Eleni’s claim on

grounds that it was excluded by reason of two clauses

in the charterparty being Clause 49 (Capture, Seizure

and Arrest) and Clause 101 (Piracy Clause). Eleni

appealed the Tribunal’s award under section 69 on the

basis that the Tribunal had wrongly construed these

clauses of the charterparty.

The Court restated its approach to the proper

construction of contracts under English law, including

cases which have particular reference to time

charterparties. Under a time charterparty, the risk of

delay lies on the charterer who remains liable to pay

hire in all circumstances unless exempt from doing so

under an off-hire provision. Accordingly, all other things

being equal, doubts as to the meaning of such

exceptions are to be resolved in favour of the owners.

That was the rule in Royal Greek Government v

Ministry of Transport [1959] 1 KB 525.

The Court considered the two clauses in turn:

Clause 49 - Capture, Seizure and Arrest

“Should the vessel be captures [sic] or seized or

detained or arrested by any authority or by any legal

process during the currency of this Charter Party, the

payment of hire shall be suspended for the actual time

lost…”

The Court rejected the reasoning of the Tribunal that

the word ‘capture’ was not qualified by the words ‘by

any authority or by any legal process’. In doing so the

Court commented that capture did not

necessarily connote the use of force: “Unoccupied land

or

undefended goods may be captured. My wife may

capture my heart. I see no difficulty as a matter of the

ordinary use of language in the concept of a

governmental authority or ruler capturing a vessel.”

This approach was also consistent with the

construction of the same word in charterparties or

maritime affairs generally - see Re an arbitration

between Tonnevold and Finn Friis [1916] 2 KB 551.

Even if the Court were left in doubt about the

construction of clause 49, which it was not, that doubt

would be resolved in favour of the Owners in

accordance with the principles in Royal Greek

Government.

Clause 101 – Piracy Clause

“Charterers are allowed to transit Gulf of Aden any

time… In case vessel should be threatened/kidnapped

by reason of piracy, payment of hire shall be suspend-

ed...”.

Eleni argued that the third sentence put the Vessel off-

hire only if the kidnap or threat of kidnap by piracy took

place during transit of the Gulf of Aden, which was a

finite geographical area capable of identification. The

majority of the Tribunal found that the Clause was

operative wherever the Vessel was threatened in the

Gulf of Aden or as an immediate consequence of her

transiting or being about to transit the Gulf. The Court

agreed with the Tribunal. The appeal succeeded on

Clause 49, but failed on Clause 101.

“ Unoccupied land or undefended

goods may be captured. My wife

may capture my heart. I see no

difficulty as a matter of the

ordinary use of language in the

concept of a governmental

authority or ruler capturing a

vessel.”

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7. Equitas Insurance Ltd v Municipal Mutual

Insurance Ltd [2019] EWCA Civ 718 (17 April 2019)

The Court of Appeal allowed an appeal under section

69 from the award of a ‘judge-arbitrator, appointed in

accordance with the rarely-used section 93. The Court

provided clarification on the treatment of losses in

mesothelioma claims in reinsurance contracts and,

specifically, whether a reinsured is entitled to ‘spike’ its

claims (i.e. choose which reinsurance year to which to

allocate losses).

Facts

Municipal Mutual Insurance Ltd (MMI) provided

Employers’ Liability (EL) insurance. MMI reinsured its

liability under annual excess of loss policies with

Lloyd’s syndicates whose liabilities have since been

transferred to Equitas Insurance Ltd (Equitas). MMI’s

insureds faced a large number of claims from

employees who contracted mesothelioma from

exposure to asbestos during their periods of

employment. MMI settled these claims without

apportionment to individual policies or periods. This

was because the Compensation Act 2006 provides

that an insured employer who has tortiously exposed

an employee to asbestos is liable in respect of the

whole of the damage irrespective of whether other

exposures gave rise to any other liability. Therefore,

provided that MMI provided cover for some of the

period of the alleged exposure, each MMI policy was

100% liable for the claim. MMI spiked its claims to

Equitas, on the basis that similarly, each reinsurance

policy was also liable in full. This helped MMI to

maximise its reinsurance recoveries. Equitas disputed

the spiking, contending that MMI was only entitled to

claim against each applicable reinsurance contract a

pro rata proportion of the loss attributable to the under-

lying claim, calculated on a time on risk basis.

Issues

Flaux J, sitting as judge-arbitrator (the Tribunal)

pursuant to his appointment under section 93, held in

favour of MMI. The Court of Appeal unanimously

allowed the appeal. The Court considered three issues

in turn:

i. In the event of an insured employee being tortiously

exposed to asbestos in multiple years of EL insur-

ance, and the insurer settling the employer’s claim

without allocating the loss to any particular year, is

the insurer obliged to present its reinsurance claim

on a pro rata, time on risk basis, either because:

a. The contribution to the settlement of each engaged

policy must by necessary implication be treated as

having been on that basis (Deemed Allocation/

Implied Term); or

b. The doctrine of good faith requires the claim to be

presented on that basis (Good Faith); and

ii. If the EL insurer is not so obliged, how are the rights

of recoupment and contribution acquired by the

reinsurers of that year to be calculated

(Contribution and Recoupment)?

From the outset, the Court stated that it wished to

avoid the Contribution and Recoupment route as the

resultant calculations would be greatly complex and

expensive.

Deemed Allocation/ Implied Term

Equitas argued that MMI must be deemed to have

settled its inwards insurance claims on a time on risk

basis, such that the value represented by the

settlement consideration should be regarded as

implicitly allocated in pro rata shares across all

triggered policies in proportion to the contribution to the

overall risk made during the period of each policy.

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This was argued to be the ‘real basis’ of the settlement

of the inwards claims, by analogy with cases where

courts had been prepared to investigate the true or real

basis of settlement. Alternatively, the same result could

be achieved by implying a term to the effect that the

reinsured’s ultimate net loss must be formulated by

reference to the contribution to risk made in the period

of each reinsurance. Both routes would restore the

‘elementary principle’ that insurance cannot ‘operate on

a basis which allows an insured to select the period

and policy to which a loss attaches’.

The Court of Appeal rejected this argument. That was

not what had happened. To say otherwise would

involve a significant extension of the real basis of

settlement cases which it would be difficult to confine

within the Fairchild enclave. Moreover, it was

inconsistent with the principle that reinsurance is a

form of insurance on the original subject matter

insured. As a matter of construction of the reinsurance

contracts MMI was prima facie entitled to present the

whole of its ultimate net loss to any reinsurance year of

its choice.

Good Faith

The Court of Appeal held that there were powerful

reasons to support the implication of a term in the very

specific reinsurance context existing within the

Fairchild enclave that the insurer’s right to present its

reinsurance claims must be exercised in a manner

which is not arbitrary, irrational or capricious. Spiking

was inconsistent with the presumed intentions and

reasonable expectations of the parties at the time when

the contracts were concluded. Rationality required that

they be presented by reference to each year’s

contribution to the risk, normally measured by

reference to time on risk.

Moreover spiking was inconsistent with fundamental or

elementary principles of liability insurance laws as it

arises out of the control which the insurer can exercise

in allocating its inwards claims and its exclusive

knowledge of its reinsurance arrangements over an

extensive period.

Contribution and Recoupment

As the Court of Appeal held that MMI was not entitled

to spike its claims, the issue of contribution and

recoupment did not arise. However, the Court held that

in the event that if it were wrong on the Good Faith

point, Equitas’ method of calculating contribution was

to be preferred.

Equitas proposed a ‘ground up’ method, just as if a

proportionate part of the claim had been presented

under each reinsurance policy. MMI contended the

‘independent liability’ method which involved

apportioning the loss for which the spiked reinsurance

contracts were liable between (a) the retentions and

the various layers of reinsurance in each of the

applicable years of reinsurance cover in proportion to

the amounts which would have been borne by each

such layer or retention if the whole of the claim had

been presented to each relevant year; and (b) the

relative amount of exposure which occurred in each

relevant year.

Equitas’ method was to be preferred for three reasons.

First, the reality was that critical exposures to a group

of victims would have occurred in a number of years, in

each of which MMI agreed to bear a retention, so that it

was unjust that under the MMI method only a single

retention applies. Second, the basis on which higher

layer reinsurers agreed to participate was that they

would not be liable until the retention and any lower

layers had been exhausted. Under the Equitas method

higher layers of reinsurance would not contribute until

the lower layers had been exhausted. Third, Equitas’

method rightly precluded MMI from rights of

contribution in respect of years of layers which it chose

not to insure.

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Other cases

1. Stockman Interhold SA v Arricano Real Estate Plc [2018] EWHC 4 (Comm) (05 January 2018

2. Danilina v Chernukhin & Anor [2018] EWHC 39 (Comm) (19 January 2018)

3. Lukoil Asia Pacific Pte Ltd v Ocean Tankers (Pte) Ltd (Ocean Neptune) [2018] EWHC 163 (Comm) (02 February 2018)

4. Exportadora De Sal SA De CV v Corretaje Maritimo Sud-Americano Inc [2018] EWHC 224 (Comm) (09 February 2018)

5. Jiangsu Shagang Group Co Ltd v Loki Owning Company Ltd [2018] EWHC 330 (Comm) (01 March 2018)

6. GPF GP S.À.R.L. v The Republic of Poland [2018] EWHC 601 (Comm) (02 March 2018)

7. GPF GP S.À.R.L. v The Republic of Poland [2018] EWHC 409 (Comm) (02 March 2018)

8. SEA2011 Inc v ICT Ltd [2018] EWHC 520 (Comm) (14 March 2018)

9. Uttam Galva Steels Led v Gunvor Singapore Pte Ltd [2018] EWHC 1098 (Comm) (10 May 2018)

10.Sea Master Shipping Inc v Arab Bank (Switzerland) Ltd [2018] EWHC 1902 (Comm) (25 July 2018)

11.Bond v Mackay & Ors [2018] EWHC 2475 (TCC) (25 September 2018)

12.X v Y [2018] EWHC 741 (Comm) (12 February 2018)

13.Allawi v The Islamic Republic of Pakistan [2019] EWHC 430 (Comm) (15 February 2019)

14.Orascom Tmt Investments SARL v Veon Ltd [2018] EWHC 985 (Comm) (22 March 2018)

15.Sevylor Shipping And Trading Corp v Altfadul Company for Foods, Fruits & Livestock & Anor [2018] EWHC 629 (Comm) (23 March 2018)

16.Seatrade Group NV v Hakan Agro DMCC, Re The Aconcagua Bay [2018] EWHC 654 (Comm) (26 March 2018)

17.Punch Taverns Ltd & Anor v Swan Hospitality Ltd [2018] EWHC 905 (Ch) (24 April 2018)

18.Dreymoor Fertilisers Overseas PTE Ltd v Eurochem Trading GmbH [2018] EWHC 909 (Comm) (24 April 2018)

19.Agile Holdings Corporation v Essar Shipping Ltd [2018] EWHC 1055 (Comm) (11 May 2018)

20.Navigator Spirit SA v Five Oceans Salvage SA [2018] EWHC 1108 (Comm) (15 May 2018)

21.T v V & W [2018] EWHC 1492 (Comm) (16 May 2018)

22.Grindrod Shipping PTE Ltd v Hyundai Merchant Marine Co Ltd [2018] EWHC 1284 (Comm) (24 May 2018)

23.Fehn Schiffahrts GmbH & Co KG v Romani SPA [2018] EWHC 1606 (Comm) (27 June 2018)

24.Asset Management Corporation Of Nigeria v Qatar National Bank [2018] EWHC 2218 (Comm) (12 July 2018)

25.A v B [2018] EWHC 3366 (TCC) (27 July 2018)

26.A v B [2018] EWHC 2325 (Comm) (07 September 2018)

27.Fleetwood Wanderers Ltd (t/a Fleetwood Town Football Club) v AFC Fylde Ltd [2018] EWHC 3318 (Comm) (30 November 2018)

28.Midnight Marine Ltd & Anor v Thomas Miller Speciality Underwriting Agency Ltd Re: LABHAULER [2018] EWHC 3431 (Comm) (12 December 2018)

29.Sonact Group Ltd v Premuda Spa "Four Island" [2018] EWHC 3820 (Comm) (12 December 2018)

30.Silverburn Shipping(IoM) Ltd v Ark Shipping Company LLC (M/V "ARCTIC") [2019] EWHC 376 (Comm) (22 February 2019)

31.Soletanche Bachy France SAS v Aqaba Container Terminal (Pvt) Co [2019] EWHC 362 (Comm) (17 January 2019)

32.Patel v Patel [2019] EWHC 298 (Ch) (18 February 2019)

33.J v K [2019] EWHC 273 (Comm) (24 January 2019)

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Key cases

1. RBRG Trading (UK) Ltd v Sinocore International

Co Ltd [2018] EWCA Civ 838 (23 April 2018)

The Court enforced a New York Convention award (the

Award) despite challenges on illegality.

The dispute arose out of RBRG Trading (UK) Limited

(RBRG), the buyer, breaching a contract for the sale of

rolled steel coils by unilaterally amending the letter of

credit to change the shipment date without Sinocore

International Co Ltd (Sinocore)’s consent. Sinocore

presented forged bills of lading bearing the amended

shipment date but RBRG stopped its bank from paying

by applying for an injunction. As a result Sinocore

terminated the contract and sold the coils to a different

buyer but at a lower price.

In a CIETAC arbitration seated in Beijing, the Tribunal,

issuing the Award in favour of Sinocore, held that

although Sinocore had behaved fraudulently by

attempting to extract payment from RBRG through

forged bills of lading, it did not preclude this entity from

claiming damages for its losses resulting from RBRG’s

breach. Further the Tribunal held that RBRG had

indeed breached the contract by unilaterally amending

the letter of credit.

Sinocore subsequently obtained an order for

enforcement from the English courts. RBRG

contended that the recognition and enforcement of the

Award would be contrary to public policy on the basis

that the Award has been procured by fraud (i.e. the

forged bills of lading) and should therefore be refused


RBRG’s application was dismissed on the basis that

the Award was based on a breach of contract

committed by RBRG. This breach predated the forgery

and, in any event, the bank had not been deceived by

the fraud.

Dismissing RBRG’s subsequent appeal, Hamblen LJ

held that “here is nothing which offends English public

policy if an Arbitral Tribunal enforces a contract which

does not offend the domestic public policy under either

the proper law of the contract or its curial law, even if

English domestic public policy might have taken a

different view”. He noted that there is no public policy

issue in refusing the enforcement of an award which is

based on a contract during the course of which there

has been a failed attempt at fraud. This was, at most,

an “attempt” at fraud and as the underlying contract

had not been procured by fraud, there was no reason

to refuse enforcement of the Award.

B. Enforcement

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2. Eastern European Engineering Ltd v Vijay

Construction (Proprietary) Ltd [2018] EWHC 1539

(Comm) (20 June 2018)

The Court decided against granting a Worldwide

Freezing Order (WFO) in support of a foreign arbitral

award.

Eastern European Engineering Ltd (EEEL) applied to

the Commercial Court for a WFO against Vijay Con-

struction (Proprietary) Ltd (Vijay) in support of an ICC

arbitral award.

EEEL had entered into six contracts with Vijay relating

to the construction of a resort in the Seychelles. The

contracts were governed by Seychelles law and provid-

ed for ICC arbitration seated in Paris. Before the con-

struction work was finished, EEEL terminated the

contract because of alleged delays and defects. EEEL

commenced an ICC arbitration, and the sole arbitrator

later held that EEEL had validly terminated each of the

construction contracts and ordered Vijay to pay EEEL

damages plus interest and costs amounting to

approximately €18 million. Vijay did not pay.

Prior to this application, there had been a number of

other proceedings commenced either to enforce or

challenge the award in France, England and the

Seychelles, including applications for injunctive relief.

In England, EEEL applied for a WFO to restrain Vijay

from removing from England and Wales any assets in

the jurisdiction and disposing of, dealing with or dimin-

ishing the value of its worldwide assets up to €18

million. Vijay argued that the court lacked jurisdiction to

grant a WFO because:

i. the only claim contained in EEEL’s arbitration claim

form was a claim to enforce the award and the claim

form was served out of the jurisdiction without

permission;

ii. the seat of the arbitration was not in England and

Wales and so the court could not make such an order

in aid of execution of a foreign arbitral award; and

iii. the court should not exercise its discretion to grant

the order.

The Court considered that it did have jurisdiction to

grant a WFO but in exercising that discretion the case

for a WFO was not made out, holding that:

i. There was only a very limited link to this jurisdiction:

both parties were Seychellois, the subject matter of

the contract was in the Seychelles, the contracts

were governed by Seychellois law and Paris was the

seat of the arbitration. Furthermore, Vijay’s assets in

England and Wales were very minor compared to the

assets in the Seychelles.

ii. The Seychellois Court of Appeal had recently

discharged a freezing injunction and a similar order

in England and Wales would be inconsistent with an

order of the primary court in relation to those assets.

Furthermore, the Seychellois courts remained

empowered to grant future injunctive relief over

assets in the Seychelles and, as such, the English

court should defer to those courts.

iii. If the English court granted a WFO, there would be

a risk of conflicting and inconsistent orders.

iii. The judge did, however, consider that it was

appropriate to grant a domestic freezing order over

the limited assets in the jurisdiction because he was

satisfied that there was solid evidence that there

was a real risk that any judgment would go

unsatisfied, because the assets were movable and

Vijay had expressly stated in evidence that it would

rather not pay the award and would allow itself to be

wound up.

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3. Micula & Ors v Romania (Rev 1) [2018] EWCA Civ

1801 (27 July 2018)

The Court of Appeal dismissed an appeal against a

stay of enforcement of an ICSID award, but overturned

the decision on security, ordering Romania to provide

security as a term of the stay.

Background

In December 2013, the Appellants (the Miculas)

obtained an ICSID award (the Award) against the

Respondent (Romania) for violation of the Sweden-

Romania bilateral investment treaty.

In October 2014, the Miculas registered the Award in

England under s 1(2) Arbitration (International

Investment Disputes) Act 1966 (the 1966 Act) which

enacts the ICSID convention in UK law (the

Registration Order).

In March 2015, the European Commission adopted a

Final Decision prohibiting Romania from executing the

Award on ground that to do so would constitute new

State Aid contrary to EU law. In July 2015, Romania

filed its application in the Commercial Court to set

aside, vary, or stay the Registration Order. In

November 2015, the Miculas commenced proceedings

before the General Court of the European Union (the

GCEU proceedings) seeking an annulment of the

Commission’s Decision, and filed a cross-application

for security for damages in the Commercial Court in the

event of the Court acceding to Romania’s application

before the GCEU. In June 2017, Blair J refused the

application to set aside the Registration Order.

However, he granted a stay of enforcement pending

determination of the GCEU proceedings, but refused

an application for security to be ordered as a condition

of granting the stay.

The Miculas appealed. The European Commission

participated as amicus curiae.

Issues

i. Issues relating to the grant of stay:

1. Whether Blair J erred in failing to have appropriate

regard to the fact that the Award was res judicata

and, in accordance with the Kapferer principle

(arising in the case of Kapferer, C-234/04, [2006],

ECR I-2585), was to be given effect even if doing so

would be

inconsistent with EU law;

2. Whether, the 1966 Act obliges the English Court to

enforce the Award; and

3. If so, whether the Court’s duties under EU law or

those under the 1966 Act prevail.

First, the Miculas relied upon the Kapferer principle,

which dictates that the principle of cooperation under

Art 10 EC Treaty does not require a national Court to

disapply its internal rules of procedure in order to

review and set aside a final judicial decision if that

decision should be contrary to EU law. They therefore

argued that domestic law principles of res judicata

applied where there was a conflict between final

domestic Court decisions or arbitral award recognised

domestically, and EU law.

The Court of Appeal held that the Award became res

judicata on the date it was issued under the 1966 Act

(and therefore before the Commission’s Decision), but

held that Blair J was wrong to grant a stay pending the

determination of the Kapferer principle in the GCEU

proceedings as it was not a point which the GCEU

would need to decide.

Further, the Court of Appeal agreed with Romania and

the Commission, that the Kapferer principle could not

be relied upon in certain cases concerning State Aid,

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following Klausner Holz Niedersachsen v Land

Nordrhein-Wesfalen EU:C:2015:742 in which it was

established that the principle of res judicata was

subordinate to concerns about the circumvention of

fundamental aspects of State Aid rules. EU law would

not permit it to be used so as to circumvent the

prohibition on State Aid.

Second, Arden and Leggatt LJJ (by majority), held that

Blair J had erred in law in holding that the 1966 Act had

the effect of applying EU law to the Award on

registration simply because the UK was a member of

the EU at that date. Parliament was unlikely to have

intended for the 1966 Act to have the effect that

registered ICSID awards should be brought within the

scope of a later international treaty, which did not

expressly affect the UK’s ICSID obligations, by the

mere procedural step of registering an award as a

judgment. Leggatt LJ further stated that under the

ICSID Convention enforcement was automatic and

the1966 Act could therefore not be interpreted as to

override the UK’s obligations under the Convention.

The Court of Appeal nonetheless held that a temporary

stay was justified pending the outcome of the GCEU

proceedings, under its discretionary powers under the

CPR.

Third, in order to determine whether the UK’s ICSID

obligations conflicted with its EU law obligation, the

Court was required to consider the applicability of

Article 351 Treaty on the Functioning of the European

Union, which dictates that the rights and duties under a

Treaty made by a member state prior to accession to

the EU with a third country are in general not affected

by EU law. The Court by majority held that the issue be

stayed, as it was being considered in the GCEU

proceedings.

ii. Issues relating to Security:

1. Whether the Court has power under domestic law to

require Romania to provide security as a condition

of the stay; and

2. If so, does the Commission’s decision and/or the

duty of sincere cooperation under EU law preclude

the Court from granting a stay conditional on the

provision of security.

The Court of Appeal allowed the appeal against the

Judge’s refusal to grant security.

The duty of sincere co-operation applied, and Blair J

was correct to find that it was precluded from making

the provision of security a condition of the stay. Such

an order was just as much in conflict with the

Commission’s Decision, irrespective of whether the

obligation to pay the Award arose ‘immediately or only

in the event that Romania does not provide security’.

However, the provision of security into Court, which

would not involve making any payment to the Appel-

lants, was not incompatible with EU law. It represented

compliance with a Court order, the purpose of which

was to ensure that there were funds available in the

event that the Commission’s Decision was annulled.

Romania was therefore ordered to pay £150 m as a

term of the stay.

4. Stati & Ors v The Republic of Kazakhstan [2018]

EWCA Civ 1896 (10 August 2018)

The Court of Appeal allowed an appeal against the

decision to set aside a notice of discontinuance in

proceedings under section 101 to enforce a New York

Convention Award.

The case concerned the Appellants’ (Stati) attempt to

enforce a SCC arbitral award (the Award). The

Republic of Kazakhstan (Kazakhstan) sought to annul

the Award in Sweden, the seat of the Award, on

various grounds including an allegation of fraud. That

application was refused. Whilst the Swedish Courts did

not determine the truth or otherwise of the fraud

allegation, it held that the alleged fraud was not a

ground in Swedish law for setting aside the Award.

In England, Stati successfully applied to enforce the

Award. Kazakhstan applied to set the order aside. Stati

thereafter served a notice of discontinuance (the

Notice) under CPR 38.2. Kazakhstan issued an

application seeking determination on merits of the

fraud allegation, submitting that it was an independent

free-standing claim or, alternatively, that the Notice

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should be set aside. At first instance, Knowles J set

aside the Notice and gave further case management

directions for the fraud allegations.

Stati appealed.

The Court of Appeal, held that the fraud claim was not

independent of the enforcement proceedings and so

unaffected by the Notice. The State’s submission, that

the direction of Knowles J that the ‘fraud claim’ shall

proceed to trial ‘as if commenced under CPR Part 7’

constituted the issue of a separate free-standing set of

proceedings, was dismissed. Those were merely case

management directions.

Further, the discretion to set aside a notice of

discontinuance under CPR 38.4 was general and

unqualified. It was not, as was contended by Stati, and

as had been the case under the Rules of the Supreme

Court, limited to cases where it amounted to an abuse

of process, or sought in order to gain a collateral

advantage or involved some other substantive vice.

The Court however recognised substance in the

criticism of Knowles J’s characterisation of a notice of

discontinuance as ‘simply a procedural first step’.

However, Kazakhstan did not have a legitimate interest

in the continuation of the proceedings. Arbitrations are

subject to control by the laws and Courts of the country

of their seat, and the New York Convention recognises

that the validity of an award is primarily a matter for the

curial law. The English Courts were only engaged for

the purposes of recognition and enforcement of the

Award; the fraud allegations were added as a ground

for setting aside the enforcement order. That purpose

had ceased to exist, and it was not the function of the

Court to hear cases which would have no relevant

result. The mere desire of a party to have issues tried

was not a justification for the continuation of

proceedings.

The Court recognised that there were exceptional

circumstances justifying continuance, if, for example, a

finding of fraud would create an issue estoppel in other

countries where enforcement proceedings were

pending, or where the notice had been served at the

start or during the trial. That was not the case. The

Court of Appeal stated a general disinclination on the

part of the Courts to give what amount to advisory

rulings on issues for the benefit of foreign Courts. As to

findings of facts, counsel were unable to find any case

in which Courts of one country had made unsolicited

findings of fact for the supposed benefit of the Courts

of other countries.

Moreover, whilst there was a power to require the

continuance of proceedings in order to determine

whether its process had been knowingly abused, this

was not the case. The fraud allegation had been

insufficient to invalidate the Award under its curial law,

and was therefore incapable of establishing that the

original application was a ‘fraud on the English Court’.

5. ArcelorMittal USA LLC v Essar Steel Ltd [2019]

EWHC 724 (Comm) (25 March 2019)

The Court gave permission under section 101 to en-

force an ICC arbitration award seated in Minnesota,

USA and, in support of the application, confirmed the

issuance of a worldwide freezing order (WFO). The

Defendant party was a Mauritian company with little

assets held in the UK but the Court confirmed its will-

ingness in cases of International Fraud to support the

enforcement of an international arbitral award (the

Award).

ArcelorMittal USA LLC (AMUSA), a company

incorporated in Delaware, obtained an ICC arbitral

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award against Essar Steel Ltd (Essar), a company

incorporated in Mauritius, and which was a part of the

wider Essar Group. AMUSA obtained permission under

section 101 to enforce the arbitration award in England.

In addition to enforcement, AMUSA also obtained a

WFO, search orders and Norwich Pharmacal

relief. The Defendant applied to discharge the WFO

and other relief granted but the application was

dismissed for a number of reasons:

First, the Court confirmed that, given the historic

misconduct at the Essar Group in various jurisdictions,

there was a risk that Essar would dissipate its assets.

Second, the Court had discretionary powers to grant

injunctive relief under section 37 of the Senior Courts

Act 1981 in circumstances where it was just and

convenient to do so. In the circumstances, it was just

and convenient under section 37(1) to grant a WFO

because the case was properly to be regarded as

involving ‘international fraud’. The principles as

applicable when the Court was asked to grant a

freezing order in support of relief which has been or is

to be granted under section 101, was summarised

in Conocophillips China Inc v Greka Energy

(International) BV [ 2013] EWHC 2733: it will rarely be

appropriate to exercise jurisdiction to grant a freezing

order where a Defendant has no assets here and owes

no allegiance to the English court by the existence of in

personam jurisdiction by domicile, or residence, or

some other reason. Protective measures should

normally be left to the courts where the assets are to

be found or where the Defendant resides.

Essar argued that there were no connecting factors to

England, and that the English court should not become

an ‘international policeman, let alone an international

detective agency’. The seat of the arbitration was

Minnesota, and it was of no significance that the Award

could now be enforced as an English judgment. Essar

was a Mauritian company with no substantial assets in

England: its only assets in England were two bank

accounts with very small sums. Its directors were not

English. There were no real connecting factors

between Essar Steel and England.

However, in cases concerning ‘international fraud’,

Courts would not look for such strong connecting

factors to England as it would in other cases:

see Republic of Haiti v Duvalier (No 2) [1990] 1 QB 202

(CA), Mobil Cerro Negro Ltd v Petroleos de Venezuela

SA [2008] 1 Lloyd's Rep 684

Moreover, the Court noted that the term ‘international

fraud’ was not precisely defined in case law, but, that it

was not confined to cases where the underlying cause

of action was a claim in deceit or a proprietary claim

relating to the theft of assets. It was enough if that

there be a ‘strong case of serious wrongdoing

comprising conduct on a large or repeated scale

whereby a company, or the group of which it is a

member, is acting in a manner prejudicial to its

creditors, and in bad faith’. In the current case, the

Court regarded the attempted dissipation of Essar’s US

$1.5 billion asset in the face of the commencement of

the arbitration proceedings, as sufficient in itself to

warrant intervention under the ‘international fraud’

exception or as constituting ‘exceptional

circumstances.’

Third, the search order was ancillary to the present

proceedings in which a WFO had been granted and

which was to remain in place. It therefore satisfied

section 7 of the Civil Procedure Act 1997 which grants

the power to make an order for “the purpose of

securing, in the case of any existing or proposed

proceedings in the court – (a) the preservation of evi-

dence which is or may be relevant”.

Fourth, Norwich Pharmacal relief was available in the

current case to ‘support and make effective’ a WFO

which the Court had granted.

“However, in cases concerning

‘international fraud’, Courts

would not look for such strong

connecting factors to England as

it would in other cases.”

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Other cases

1. PAO Tatneft v Ukraine [2018] EWHC 1797 (Comm) (13 July 2018)

2. General Dynamics United Kingdom Ltd v The State of Libya [2018] EWHC 1912 (Comm) (20 July 2018)

3. Dreymoor Fertilisers Overseas PTE Ltd v Eurochem Trading GmbH & Anor [2018] EWHC 2267 (Comm) (24 August 2018)

4. Eastern European Engineering Ltd v Vijay Con-struction (Proprietary) Ltd [2018] EWHC 2713 (Comm) (11 October 2018)

5. Boru Hatlari AS & Ors v Tepe Insaat Sanayii AS (Jersey) [2018] UKPC 31 (22 October 2018)

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Key cases

Michael Wilson & Partners Ltd v Emmott [2018]

EWCA Civ 51 (31 January 2018)

The Court of Appeal allowed an appeal against an anti-

suit injunction restraining the Defendant from pursuing

foreign proceedings in breach of an arbitration

agreement. The judgment forms a part of a long-

running dispute fought across multiple jurisdictions for

over a decade.

The dispute concerned a quasi-partnership agreement

in 2001 between Michael Wilson & Partners (MWP)

and Mr Emmott under which Mr Emmott became a

director and shareholder of MWP (the MWP

Agreement); and a ‘Cooperation Agreement’ in 2005

between Mr Emmott and third parties, two of whom

were employees of MWP, under which ‘Temujin’ a

consultancy business was established. Both

agreements contained an arbitration provision which

subjected all and any disputes to be governed by

English law arbitration in London.

In December 2005, Mr Emmott left MWP on

acrimonious terms to work for Temujin. MWP

commenced arbitration against Emmott, and

proceedings in New South Wales against the two

former employees of MWP party to the Cooperation

Agreement and against Temujin (NSW1) for dishonest

and fraudulent breach of fiduciary duties and duty of

care to MWP. The arbitral Tribunal found in favour of

Mr Emmott, whilst the Court found joint and several

liability of the Defendants in favour of MWP.

MWP subsequently procured assignments to itself

from the liquidators and trustees in bankruptcy of the

Defendants in NSW1 for contribution from Mr Emmott

in respect of their liability in NSW1 and, in reliance of

those assignments, commenced proceedings against

Emmott in New South Wales (NSW2).

Mr Emmott obtained an anti-suit injunction from the

English Courts restraining MWP from pursuing

proceedings arising out of or in relation to the MWP

Agreement or the Cooperation Agreement, otherwise

than in accordance with the arbitration Clauses. MWP

appealed.

First, the Court of Appeal considered Fili Shipping Co

Ltd v Premium Nafta Products Ltd [2007] UKHL 40 in

which Hoffman LJ stated that the interpretation of an

arbitration Clause should start from the “assumption

that the parties, as rational businessmen, are likely to

have intended any dispute arising out of the

relationship into which they have entered or purported

C. Anti-suit Injunction

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to enter to be decided by the same Tribunal’. Here, the

rights which MWP sought to enforce in NSW2 were

rights of third parties, none of whom were parties to the

MWP Agreement, and of which it was highly unlikely to

have been the intention of the parties to be included

within the scope of the arbitration Clause.

Second, the Court held that it was not in a position to

conclude that the assigned claims in respect of the

former employees of MWP fell within the Cooperation

Agreement. Mr Emmott had consistently maintained

that he was not a partner in Temujin and therefore not

bound by the arbitration Clause in the Cooperation

Agreement. His reliance on the Cooperation

Agreement, for the purposes of obtaining an anti-suit

injunction was contrary to that position. The arbitral

Tribunal had expressly declined to reach a conclusion

on this point and, any findings in NSW1 otherwise were

not binding on him as he was not a party to NSW1.

Third, the Court held that there was no issue estoppel

as the assigned claims were not brought by MWP in its

own right. The Court stated that it was an essential

requirement of issue estoppel that the parties or their

“privies” in the earlier proceedings relied on as creating

an estoppel, and those in the later action in which that

estoppel is raised as a bar, must be the same. The

assignors could not be considered to be “privies” of

MWP, since they were not parties to the MWP

Agreement or to the arbitration and they did no acquire

their rights through MWP. MWP was entitled to assert

the assigned claims in its own name.

Fourth, the Court held that the term “abuse of process”

was inappropriate as that was a matter for the

Australian Courts. The consideration for the English

Courts was rather, whether as the “judicial guardian for

the integrity of an arbitral process in London”, it ought

to exercise its discretion in favour of an anti-suit

injunction. On the facts, the Court held that it would be

oppressive and vexatious, and highly unjust for MWP

to be able to recover compensation from Emmott in

NWS2 on the basis of claims on which it lost and other

findings which were adverse to it in the arbitration or

which it made a conscious decision not to advance.

The Court allowed the appeal, but substituted in place

of the original injunction an injunction against MWP

advancing in NSW2:

i. Claims which it lost in the arbitration;

ii. Matters contrary to findings in the arbitration which

were adverse to MWP; and

iii. Claims for fraud or conspiracy.

The Court clarified that the injunction did not extend to

the Temujin partnership claims.

Nori Holding Ltd & Ors v Public Joint-Stock

Company 'Bank Otkritie Financial Corpora-

tion' (Rev 1) [2018] EWHC 1343 (Comm) (06 June

2018)

The Court confirmed that it has the power to grant

anti-injunction injunctive relief for proceedings issued in

non-Member State courts in breach of arbitration claus-

es but could not do so for those issued in the courts of

Member States.

“The consideration for the English

Courts was rather, whether as the

“judicial guardian for the integrity

of an arbitral process in London”,

it ought to exercise its discretion in

favour of an anti-suit

injunction.”

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Nori Holding Ltd & Others (the Claimants) (companies

incorporated in the BVI and Cyprus) entered into

pledge agreements (the Agreements) with Bank

Otkritie Financial Corporat (the Defendant), a Russian

bank. The Agreements were for shares in a company

that owned valuable Moscow property and contained

LCIA arbitration clauses. The Agreements were

replaced with long-term unsecured bonds and the

issue was whether this was fraud (as contended by the

Defendant) or a valid company restructuring (as put

forward by the Claimants). The Defendant issued

proceedings in Cyprus and Russia whilst the Claimant

commenced LCIA arbitrations and applied for an anti-

suit injunction in the Commercial Court.

The Defendant argued that the anti-suit injunction

should not be granted on the basis that:

i. An application for anti-suit relief should be made to

the arbitral Tribunal and the court should not

intervene;

ii. The Russian Proceedings were not in breach of the

arbitration agreements as they related to an

insolvency claim;

iii. There can be no injunction to restrain the Cypriot

Proceedings as Cyprus is an EU Member State;

iv. There are strong reasons not to grant the injunction,

namely that the Russian and Cypriot Proceedings

would continue in any event and those jurisdictions

comprised the natural forums in which to determine

the dispute.

v. No injunction should be granted as the Claimants

had delayed in making the application.

In relation to (i), Males J held that the availability of anti

-suit relief from arbitrators was not a reason for the

court to refuse an injunction and therefore that it was

appropriate for the High Court to exercise its general

statutory power.

In relation to (ii) (Russian Proceedings), the Court

concluded that the arbitration Clause was widely draft-

ed and did not include any express exclusion of dis-

putes of any kind. As such there was no good reason

to imply a limitation that the Clause did not extend to

insolvency proceedings to void a transaction at an

undervalue. This was a dispute which the arbitrators

could determine as they could decide whether the

Claimants defrauded the Bank and could grant any

remedy to which the Bank might be entitled if they did.

In relation to (iii) (Cypriot Proceedings), the

Defendant did not deny that the Cypriot proceedings

contravened the arbitration Clause but argued that the

Commercial Court could not issue the anti-suit

injunction due to West Tankers Inc v Allianz SpA (Case

C-185/07). In West Tankers the Court had found that

an anti-suit injunction was incompatible with the

original Brussels Regulation which allowed the Member

State court first seised of a case to determine whether

it had jurisdiction. This was upheld in Gazprom (Case

C-536/13) by the CJEU. The issue was whether the

Recast Brussels Convention (which expressly excludes

arbitration) meant that West Tankers was no longer

good law. Males J found that the effect of Article 12 of

the Recast Brussels Convention was to exclude

arbitration from its scope of application and that courts

should apply Article II(3) of the New York Convention in

determining whether to exercise jurisdiction or stay

proceedings for arbitration. He observed that there was

‘nothing to undermine or to even address’ the

principles concerning the ‘effectiveness of the

Regulation which were affirmed in West Tankers.’ The

Commercial Court therefore found that West Tankers

remained good law and could not issue an anti-suit

injunction against the Cypriot proceedings, the decision

being that of the Cypriot court to stay the proceedings

itself pursuant to Article II(3) of the New York

Convention.

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In relation to (iv) and (v), Males J did not consider that

these were strong reasons to refuse an injunction in

this case and that there had been no real delay in the

making of the application but if there had, this was

outweighed by the Claimant’s entitlement to rely on its

right to arbitrate.

As such, an anti-suit injunction with regard the Russian

Proceedings was granted but with regard the Cypriot

Proceedings, the application for an anti-suit injunction

was dismissed.

Mobile Telecommunications Co KSC v HRH Prince

Hussam Bin Abdulaziz Au Saud [2018] EWHC 3749

(Comm) (10 August 2018)

The Court sentenced Prince Hussam, a Saudi Prince,

to twelve months imprisonment for contempt of court

for breaching an anti-suit injunction.

Mobile Telecommunications Company (MT)

commenced LCIA proceedings against HRH Prince

Hussam Bin Abdulaziz Au Saud (PH) pursuant to a

loan agreement. PH fully participated in the arbitration

and lost, the Tribunal finding he owed more than US

$0.5bn to MT (the Award). PH challenged the Award in

Commercial Court.

Having lost the arbitration, PH revived competing

proceedings he had initiated in Saudi Arabia that had

been stayed pending the outcome of the arbitration.

MT applied for an anti-suit injunction preventing PH

from continuing with the Saudi proceedings and

requiring him to withdraw them. The Court granted the

injunction, finding that the Saudi proceedings were in

breach of the arbitration Clause and vexatious. The

order was served on PH by various methods as

specified therein and by other informal routes.

Nevertheless, PH actively pursued the Saudi

proceedings, obtaining a judgment in his favour. MT

notified PH that he was in breach of the injunction and

in contempt of court. Further, MT warned PH that

unless he brought the Saudi proceedings to an end

and reversed or discharged the judgment, it would

commence committal proceedings against him. PH

ignored these warnings so MT commenced committal

proceedings. A hearing was listed, which PH chose not

to attend.

At the committal hearing, the Court was satisfied to the

criminal standard that PH had committed the contempt;

he had actively pursued the Saudi proceedings which

were designed to reverse the LCIA award.

The Court was therefore required to determine whether

the particular circumstances should result in a

sentence of imprisonment, considering the guidance

set out in Sanchez v Oboz [2016] 1 F.L.R. 897. Jacobs

J held that they were. He said that anti-suit injunctions

are important orders intended to preserve rights and

breach of them is as serious as breach of a freezing

order (which usually merits a sentence of

imprisonment). PH had deliberately breached the

injunction so as to flout the London arbitration,

demonstrating an intent to ignore the present

proceedings and continue the Saudi proceeding which

led to the anti-suit injunction in the first place. Further,

he had failed to advance any mitigating factors or an

explanation for his actions. The Court concluded that a

simple fine would be ignored and there was no

practical alternative to a prison sentence. Bearing in

mind that the shortest period of imprisonment

necessary should be awarded, the Court held that in

this case, 12 months was appropriate.

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Other cases

1. Atlas Power Ltd & Ors v National Transmission and Despatch Company Ltd [2018] EWHC 1052 (Comm) (04 May 2018)

2. Mobile Telecommunications Company Ltd v HRH Al Saud (t/a Saudi Plastic Factory) [2018] EWHC 1469 (Comm) (18 May 2018)

3. Sangamneheri v Bellamy [2018] EWHC 2569 (Comm) (24 May 2018)

4. Sabbagh v Khoury & Ors [2018] EWHC 1330 (Comm) (31 May 2018)

5. Perkins Engines Company Ltdv Ghaddar & Anor (Rev 1) [2018] EWHC 1500 (Comm) (08 June 2018)

6. Qingdao Huiquan Shipping Company v Shanghai Dong He Xin Industry Group Co Ltd [2018] EWHC 3009 (Comm) (25 September 2018)

7. General Dynamics United Kingdom Ltd v Libya [2019] EWHC 64 (Comm) (18 January 2019)

8. Aqaba Container Terminal (PVT) Co. v Soletanche Bachy France SAS [2019] EWHC 471 Comm

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Key cases

1. Progas Energy Ltd v The Islamic Republic of

Pakistan (Rev 1) [2018] EWHC 209 (Comm) (09

February 2018)

The English Court considered security for costs in

respect of a section 68 challenge to an arbitration

award (the Award) by a funded party.

The Claimant (Progas) brought UNCITRAL arbitration

proceedings against the Islamic Republic of Pakistan

(Pakistan) pursuant to the Mauritius-Pakistan Bilateral

Investment Treaty, alleging that the government of

Pakistan expropriated their investment. The Tribunal

dismissed the claim and made an award of costs in

Pakistan’s favour.

The Claimant brought a challenge to the award under

section 68(2)(d). The Defendant applied for: (i) security

of their costs in defending the challenge to the award

under section 70(6); and (ii) the costs awarded to them

by the Tribunal to be paid into Court or otherwise

secured under section 70(7). In relation to application

(i), the key question is whether the party bringing the

claim has sufficient assets. In relation to application

(ii), generally the courts should not order security

unless the applicant can demonstrate that the

challenge to the award will prejudice its ability to

enforce the award which usually requires evidence of

dissipation.

The Claimant’s claims and section 68 challenge were

funded by a professional litigation funder (PI), a

subsidiary of Burford Capital (BC). PI had not

contracted to accept liability for adverse costs orders

but prior to the hearing BC had written letters offering

to ensure that PI would meet any such orders if the

Claimant could not.

In relation to application (i), the Judge rejected the

Claimant’s argument that it had sufficient assets

available as the Defendant could seek a third party

costs order under section 51 of the Senior Courts Act

1981 against the litigation funder. The Judge further

rejected the Claimant’s position that the letter from BC

would ensure their subsidiary met any adverse cost

orders as BC had made no legally binding commit-

ments to either the Claimant or the Defendant to cover

any adverse costs orders. This letter was not evidence

of assets available to the Claimant. Therefore Pakistan

was awarded £400,000 by way of security for costs.

D. Miscellaneous

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With regard to application (ii), the Court did not find

evidence that the Claimant was involved in asset

dissipation. The Court rejected Pakistan’s arguments

holding that the approach established by existing

authorities should be applied whether or not the case

involves commercial funding or not. As such, this

application was dismissed.

2. Allianz Insurance Plc & Anor v Tonicstar Ltd

[2018] EWCA Civ 434 (13 March 2018)

In unanimously allowing an appeal against the removal

of an arbitrator under section 24, the Court of Appeal

considered the interpretation of standard Clauses and

the doctrine of stare decisis.

The case concerned the

interpretation of a reinsurance

contract which incorporated the

Joint Excess Loss Committee’s

“Excess Loss Clauses” (the JELC

Clauses), which provided at Clause

15.5: “Unless the parties otherwise

agree the arbitration Tribunal shall consist of persons

with not less than ten years’ experience of insurance or

reinsurance.”

Allianz sought to appoint Mr Alistair Schaff QC, who

had practiced insurance and reinsurance law for more

than ten years. Tonicstar disputed the appointment on

the ground that whilst Mr Schaff QC had more than ten

years’ experience in insurance and reinsurance law, he

did not have experience of insurance and reinsurance

per se. It was argued that he therefore did not possess

the qualifications required by the arbitration agreement

and sought his removal as arbitrator under s 24(1)(b).

The question before the Court was whether experience

in insurance and reinsurance law constituted

experience in insurance and reinsurance.

At first instance, Teare J held that it was bound by an

earlier High Court decision of Company x V Company

Y [2002] (unreported) in which it was held that the

parties incorporating the JELC Clauses intended a

‘trade arbitration’, which required the appointment of an

arbitrator with experience of working in the trade of

insurance and reinsurance. It was not intended to

include lawyers who provided services to the industry.

In unanimously allowing the appeal, the Court of

Appeal held that in the absence of clear expression, it

could not interpret Clause 15.5 to impose any

restrictions in how the experience should have been

gained. Such a restriction would give Clause 15.5 a

“different and unnatural meaning”. Further, there was

no such thing as insurance and reinsurance ‘itself’

which was separate and distinct from the law of

insurance and reinsurance. The practical and legal

aspects of insurance and reinsurance are intertwined

and a lawyer who had specialised in insurance and

reinsurance cases for at least ten years would have

acquired practical knowledge in insurance and

reinsurance. The Court accepted that this may not be

the case in other matters concerning

sports, engineering and

telecommunications, which were

areas clearly distinct from the law

regulating those activities.

The Court also considered the doc-

trine of stare decisis. Whilst the Court recognised that it

was not bound by the decision in Company X v Com-

pany Y, it stated an appellate Court’s reluctance to

overturn an established interpretation of a Clause as

that interpretation may have formed part of the relevant

background against which the parties have contracted

and in recognition of the value of certainty in commer-

cial law. Even if it had, whilst certainty in the law was

important, so too was “the ability of a legal system to

correct error”.

“whilst certainty in the

law was important, so too

was “the ability of a legal

system to correct error”.

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In any event, it is worth noting that the JELC Clauses

have now been revised to provide:

“The Arbitrators shall be persons (including those who

have retired) with not less than 10 years’ experience of

insurance or reinsurance within the industry or as

lawyers or other professional advisors serving the

industry.”

3. Daewoo Shipbuilding & Marine Engineering

Company Ltd v Songa Offshore Equinox Ltd &

Anor [2018] EWHC 538 (Comm) (16 March 2018)

English Commercial Court clarified the interplay

between time limits for challenging arbitration awards

and clarification/correction of awards under section 70.

The dispute arose from delays in the performance of a

contract for the design, construction and sale of drilling

rigs between Daewoo Shipbuilding & Marine

Engineering Company Ltd (DSME) and Songa

Offshore Equinox Ltd and Songa Offshore Endurance

Limited (Songa) . A third party engineering and design

consultancy was to provide the hull design (including

the front-end engineering design (FEED)

documentation). It was alleged by DSME that the

FEED documentation was defective and, under the

contract, Songa was to bear responsibility for additional

costs, expenses or delays. Songa contested this. The

question of design responsibility under the contracts

was determined separately in two arbitrations in which

DSME was held to bear full design responsibility,

including FEED.

Section 70(3) contains only two express start dates for

the running of the 28 days for any challenge to an

award:

i. “the date of the award”; and

ii. the date when the parties are notified of the outcome of “any arbitral process of appeal or review”.

The Awards were published on 18 July 2017. However,

there were a number of clerical errors (accidental slips)

in the award and DSME applied to the Tribunal to

correct these errors. This application was unopposed.

The Tribunal issued a Memorandum of Correction on

14 August 2017, 27 days after the Awards were

published.

On 8 September 2017 (24 days after the 28 day

deadline to challenge had expired) DSME issued an

Arbitration Claim Form seeking permission to appeal

the Awards. Songa applied for an order that DSME’s

application be struck out on the grounds that it was not

been brought within the 28-day limit. DSME responded

that the 28 days ran from the date of the Memorandum

of Corrections and so it was brought in time.

The Court drew a distinction between a “material”

correction and an “immaterial” correction. The Court

held that the correction/clarification process under

section 57 cannot be regarded as an “available

process of appeal or review” under section 70(3).

Therefore, applying for an “immaterial” correction will

not, in of itself, push back the start date for the running

of time. However, where a correction or clarification

must be sought in order to be able to bring the

challenge to the award itself (i.e. a material correction),

then time runs from the date of that type of correction

or clarification being made.

“Section 70(3) contains only two

express start dates for the running

of the 28 days for any challenge to

an award:

i. “the date of the award”; and

ii. the date when the parties are

notified of the outcome of “any

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4. Halliburton Company v Chubb Bermuda

Insurance Ltd & Ors [2018] EWCA Civ 817 (19 April

2018)

The English Court considered the “apparent bias” test

in respect of multiple appointments of the same

arbitrator in related Bermuda Form arbitrations.

This case was a Bermuda Form arbitration which

concerned the extent to which an arbitrator may accept

appointments in multiple arbitrations concerning the

same or overlapping subject matter with only one

common party without giving rise to an appearance of

bias and the extent to which the arbitrator could do so

without disclosure.

Following the explosion and fire on the Deepwater

Horizon oil rig in 2010, numerous claims were made

against Halliburton Company (Halliburton), BP

Exploration and Production Inc (BP) and Transocean

Holdings LLC (Transocean). Halliburton settled these

claims and sought to recoup the cost from Chubb

Bermuda Insurance Ltd (Chubb), its liability

insurer. Chubb refused to pay Halliburton’s claim and

the dispute was referred to arbitration. M was

appointed as Chairman on application of the parties to

the English commercial court, the parties not having

been able to agree an appointment

Prior to his appointment, M disclosed that he had

previously acted as arbitrator in a number of

arbitrations in which Chubb was a party and that he

was currently appointed as an arbitrator in two pending

references in which Chubb was involved. After

appointment, M accepted appointments in relation to

separate claims arising out of the same incident made

by Transocean against Chubb and a different

insurer. These proposed appointments were not

disclosed to Halliburton.

Halliburton later learned about these appointments and

applied to the court to remove M as an arbitrator. The

application was dismissed by the Court and Halliburton

appealed.

The Court of Appeal accepted that inside information

and knowledge may be a legitimate concern for a party

in overlapping arbitrations involving a common

arbitrator, but only one common party, but that in itself

does not justify an inference of apparent bias. The

Court commented that arbitrators are assumed to be

trustworthy and to understand that they should

approach every case with an open mind. The mere

fact of appointment in overlapping arbitrations does not

give rise to justifiable doubts as to the arbitrator’s

impartiality. The Court highlighted that disclosure

should be given of facts and circumstances known to

the arbitrator which would, or might, give rise to

justifiable doubts as to his impartiality.

Furthermore, the Court concluded that in these

circumstances disclosure ought to have been made by

the arbitrator but that in this case the non-disclosure

would not have led a fair-minded and informed

observer to conclude that there was a real possibility of

bias.

The Supreme Court has granted permission to appeal.

The appeal is likely to be heard some time in 2019.

5. SCM Financial Overseas Ltd v Raga

Establishment Ltd (Rev 1) [2018] EWHC 1008

(Comm) (03 May 2018)

The Court considered the general duty of arbitrators

under section 33 to act fairly in proceedings.

The SCM Financial Overseas Ltd (the Claimant)

challenged an arbitral award (the Award) on the basis

of serious irregularity under section 68 alleging that in

refusing to defer the Award and awaiting the outcome

of court proceedings in Ukraine, the Tribunal was in

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breach of its general duty to act fairly under section 33

which caused the Claimant substantial injustice. The

substantial injustice alleged to have been suffered was

that the Ukrainian courts had reached conclusions

which were irreconcilable with the Award: namely that

the arbitrators found that the Claimant was liable to pay

US $760m for shares in a Ukrainian company, whilst

the Ukrainian courts decided that those shares should

be confiscated without compensation for reasons

attributed to Raga Establishment Ltd (the Defendant).

Background

The subject matter of the arbitration concerned a Share

Purchase Agreement (the SPA) between the parties,

pursuant to which the Claimant acquired UA

Telecominvest Limited (UAT) from the Defendant. The

purchase price was to be paid in three instalments;

however, the Defendant alleged that it never received

the second and third instalments. The principal value of

the UAT shares was UAT’s indirect shareholding in

UkrTelecom.

The Claimant’s defence was that it had been misled

into buying an asset which, through no fault of the

Claimant, would be confiscated by the Ukrainian State

(the State) because of failures for which the Defendant

was ultimately responsible. The Claimant claimed that

there would be no justice in that outcome. The failures

for which the Defendant was alleged to be responsible

were:

i. a failure to invest $450m in support of UATs business

activities; and

ii. a failure to create and transfer to the State a

protected telecommunications network for the use of

Ukrainian governmental agencies. This entitled the

Claimant to rescind the SPA.

Five days before the evidentiary hearing in the

arbitration commenced, the State filed proceedings

applying for an order to return the UkrTelecom shares

to State ownership (the Proceedings).

The Claimant argued that the Tribunal should defer its

award until after the Ukrainian Court had delivered

judgment on the basis that it would be highly relevant

to the issues in the arbitration. The Tribunal, whilst

accepting that a decision in the Proceedings would be

relevant and might affect the conclusion they came to,

ultimately declined to defer its award on the basis that

this would result in uncertainty over a lengthy period

which could be prejudicial to both the Claimant and the

Defendant.

Decision

Males J stated that to determine whether there had

been a breach of section 33 it was necessary to estab-

lish that the arbitrators had acted unfairly or procedures

were adopted that resulted in unfairness. It therefore

followed that the question in this case was whether the

arbitrators’ decision not to defer the Award, as at the

date of the Award, constituted an irregularity.

The Judge accepted that a decision not to defer the

issue of an Award until further evidence is available is

capable of amounting to a breach of arbitrator’s section

33 duties.

Males J held that as the Tribunal had a wide discretion

as to how to proceed, they were entitled to reach the

decision they did based on the information they had at

the time, and the fact that they did not know how long a

potential deferral might last. Whilst some Tribunals

may have decided to defer issuance of the Award, this

Tribunal did not and as they were entitled to do so, it

was not unfair. Therefore there was no breach of

section 33 and the Claimant’s application failed.

Males J concluded that as there was no irregularity

within the meaning of section 68, the issue of

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substantial injustice did not arise but had it done so, he

would have concluded that there was a substantial

injustice because the conclusion of the arbitrators

might have been different had they had the decisions

of the Ukrainian courts to assist them.

Males J also noted that it is a risk inherent in the choice

of arbitration that a party choosing to arbitrate is at risk

of inconsistent decisions. This risk is accepted by the

parties by agreeing to arbitration.

6. Goodwood Investments Holdings Inc v

Thyssenkrupp Industrial Solutions AG (M/Y

PALLADIUM) [2018] EWHC 1056 (Comm) (09 May

2018)

English Court considered a rare application by arbitra-

tion parties under section 45 for a court ruling on a

preliminary point of law.

In 2006 Thyssenkrupp Industrial Solutions AG

(Thyssenkrupp) were engaged to construct a super

yacht by Goodwood Investments Holdings Inc

(Goodwood). In 2010, when cracks appeared in the

finished yacht, Goodwood commenced arbitration

proceedings for declaratory relief and an order for

damages or specific performance. During arbitration

proceedings, the parties entered into protracted without

prejudice settlement correspondence and at one point

Goodwood claimed that Thyssenkrup had entered into

a binding settlement agreement. Thyssenkrup

disagreed.

The parties agreed to refer this issue to court under

section 45 (referral for a ruling on a preliminary

question of law arising in arbitral proceedings) and the

Tribunal formulated the issue and gave permission to

the parties to approach the court. The reason the

arbitrators gave permission for the application to be

made was because of the inherent difficulty for the

arbitrators of reviewing without prejudice

correspondence in respect of settlement, if they were

then to decide no such settlement had in fact been

reached. The knowledge gained in reviewing the

correspondence could not influence their decision

making when deciding the arbitration.

The court ultimately decided that there was no binding

settlement agreement and the correspondence merely

consisted of offers and counter-offers. As such, the

arbitration could proceed and the parties could rest

assured that their without prejudice settlement

correspondence would not taint the decision of the

Tribunal.

7. Haven Insurance Company Ltd v EUI Ltd (t/a

Elephant Insurance) [2018] EWCA Civ 2494 (08

November 2018)

The Court of Appeal upheld an Extension of Time to

commence Arbitration under section 12(3).

The parties were both members of the Motor Insurers

Bureau (MIB), article 75 of the Articles of Association of

which provides for disputes to be resolved in the first

instance by a Technical Committee, and any appeals

to be referred to arbitration provided that a notice of

appeal was served within 30 days of being notified of

the decision of the Technical Committee.

A dispute was referred to the Technical Committee.

That dispute was resolved in favour of Haven

Insurance Company Ltd (Haven) at a meeting on 13

February 2015 at which representatives of both Haven

and EUI Ltd (Elephant) were present. Written

confirmation of that decision was sent by email on 24

February 2015, and the final minutes of the meeting

were released on 31 March 2015.

Elephant filed a written notice of appeal on 31 April

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2015. A time bar dispute arose: Haven argued that the

appeal was out of time because Elephant had been

notified of the decision of the Technical Committee,

either by being physically present at the meeting, or as

a result of email of 24 February 2015. Elephant con-

tended that, in accordance with the custom of MIB, the

time for an appeal only ran once the final minutes of

the meeting were released. It was therefore within the

30-day time limit.

The arbitrator rejected Haven’s jurisdictional challenge.

Haven appealed that decision in the High Court under

section 67. Elephant, contending that in the event the

Court should rule in favour of Haven on the time bar

point, it should be granted relief under 12(3)(a) which is

granted in circumstances which were such as to be

“outside reasonable contemplation of the parties when

they agreed the provision in

question, and that it would be

just to extend the time.”

At first instance, Knowles J

allowed Haven’s 67 challenge,

finding that Elephant’s appeal

had been out of time.

However, he granted

Elephant’s s 12 application,

supported by three key

findings of fact: first, Elephant

had believed “reasonably, if

wrongly” that time ran from the publication of the final

minutes; second, such belief was in line with ‘widely

accepted’ interpretation of Article 75 by MIB; and third,

MIB had confirmed to Elephant by email in clear terms

that that had been the ‘custom and practice’. In the

circumstances the Judge considered, it was just to

extend time.

Haven appealed. The Court of Appeal unanimously

dismissed the appeal, wholly agreeing with the

reasoning of Knowles J.

The Court of Appeal rejected Haven’s argument that

Elephant’s belief that the time bar ran from the

publication of the final minutes, was a unilateral

mistake, which was insufficient to trigger relief under

section 12. Mutual mistake was required to trigger

section 12. The Court of Appeal rejected the argument,

holding that section 12 concerned the ‘mutual

contemplation’ of the parties, the correct interpretation

of which was the consideration of the position of the

parties at the time of entering into the arbitration

agreement. This was different from mutual mistake, as

the test was prospective, not retrospective. Further,

applying Harbour and General Works Ltd v

Environmental Agency [2000] 1 WLR 950, if it had

been drawn to the parties’ attention at the time that the

Article had been agreed that the time for appealing

would subsequently be held by the Court to be different

from what was widely accepted to be the case, the

parties might well have said that the strict terms of

Article 75 should not apply because of quite

reasonable reliance upon the widely held conventional

view.

Second, Haven argued that

Knowles J had

misinterpreted Grimaldi

Compagnia di Navigazione

SpA v Sekihyo Lines Ltd

[1999] 1 WLR 708. The Court

dismissed the ground; Mance

J had expressly left open the

question of whether a single

party, acting on a mistaken,

but widely held interpretation

as to the time for commence-

ment of arbitration proceedings might be able to show

that the interpretation subsequently adopted was out-

side his reasonable contemplation within the meaning

of the section was entitled to section 12 relief.

Third, contrary to Haven’s assertion, there was no rule

that negligent omission would bar relief under section

12. Whilst the Court was very unlikely in normal

circumstances to grant relief under section 12 to a

party that had missed an arbitration deadline due to its

own negligence, it may also not be unjust to refuse

relief in certain circumstances. Each case would

depend on its own facts.

“section 12 concerned the ‘mutual

contemplation’ of the parties, the

correct interpretation of which was

the consideration of the position of

the parties at the time of entering

into the arbitration agreement. This

was different from mutual mistake,

as the test was prospective, not ret-

rospective.”

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The Chartered Institute of Arbitrators v B & Ors

[2019] EWHC 460 (Comm) (07 March 2019)

The Court granted the Chartered Institute of Arbitrators

(CIArb) an order under CPR 5.4C(2) to obtain copies

of certain documents for use in disciplinary

proceedings against the defendant arbitrator,(B).

B was a fellow of the CIArb but following his conduct

relating to his appointment in an arbitration, the CIArb

brought disciplinary proceedings against B. In brief,

there was a contractual dispute between C and D, D

applied to the CIArb for the appointment of an arbitrator

and the CIArb appointed B.

Shortly after B’s appointment, C requested information

concerning the nature and extent of the professional

relationship between B and D. The judgment of

Ramsey J in Eurocom Ltd v Siemens plc [2014] EWHC

3710 found that a representative of D had deliberately,

or recklessly, answered a question as to whether there

were conflicts of interest for B to act in an adjudication.

In this case, D had applied to the Royal Institute of

Surveyors for the appointment of an adjudicator, one of

whom was B. Ramsey J found that D’s representative

answered the question in relation to conflicts of interest

so as to exclude adjudicators who he did not want to

be appointed.

Following correspondence on the issue, B called an

arbitral hearing to determine whether or not the Tribu-

nal was “properly constituted”. The hearing took place

and B ruled that the Tribunal was properly constituted

and he had no conflict of interest. The Claimant applied

to the Court under section 24(1)(a) for the removal of B

on the grounds that circumstances gave rise to

justifiable doubts as to B’s impartiality. A hearing was

held and the Court concluded that there were grounds

for removal and there was a real possibility of apparent

bias (the Section 24 Application). B then resigned as

arbitrator and the CIArb determined that disciplinary

proceedings should be commenced against B.

The CIArb sought an order under CPR 5.4C(2) for

copies of:

i. statements of case;

ii. witness statements excluding exhibits; and

iii. written submissions and skeleton arguments from

the Section 24 Application (the Documents).

In exercising its discretion, the approach of the Court

as stated in Cape Intermediate Holdings Ltd v Dring

[2018] EWCA Civ 795 was that “the Court has to

balance the non-party’s reasons for seeking copies of

the documents against the party to the proceedings’

private interest in preserving their confidentiality”.

Moulder J decided that the CIArb had a legitimate

interest in seeking copies of the Documents and that

the interest was a public interest. However the Court

must balance that legitimate interest against the

inherent confidentiality of arbitration proceedings. One

exception to this is where the disclosure of such

material is in the interests of justice. Moulder J

considered that there was a general public interest in

maintaining the quality and standards of arbitrators

which extends beyond the interests of the parties in a

particular case. Moulder J called arbitration a

“quasi-judicial process for the resolution of disputes

and in [her] view the interests of justice lie in supporting

the integrity of this alternative dispute resolution

mechanism.”

Partially granting the application, Moulder J gave

access to most of the Documents but declined to give

access to the skeleton arguments on the basis that the

disciplinary proceedings were not based on the

findings of, and arguments advanced before, Hamblen

J. Therefore it was not necessary in the interests of

justice to give access to the skeleton arguments.

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Other cases

1. P v Q [2018] EWHC 1399 (Comm) (11 June 2018)

2. Deep Sea Maritime Ltd v Monjasa A/S [2018] EWHC 1495 (Comm) (15 June 2018)

3. Mercato Sports (UK) Ltd & Anor v The Everton Football Club Company Ltd [2018] EWHC 1567 (Ch) (12 July 2018)

4. Sodzawiczny v Ruhan & Ors [2018] EWHC 1908 (Comm) (26 July 2018)

5. Fundo Soberano De Angola & Ors v dos Santos & Ors [2018] EWHC 2199 (Comm) (16 August 2018)

6. RJ & Anor v HB [2018] EWHC 2958 (Comm) (05 November 2018)

7. Ideal Standard International SA & Anor v Herbert [2018] EWHC 3326 (Comm) (22 November 2018)

8. Ablynx NV & Anor v Vhsquared Ltd & Ors [2019] EWHC 792 (Pat) (29 March 2019)

9. Pricewaterhousecoopers LLP v Carmichael [2019] EWHC 824 (Comm) (15 March 2019)

10.Koshigi Ltd & Anor v Donna Union Foundation & Anor [2019] EWHC 122 (Comm) (30 January 2019)

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II. Key provisions of the Arbitration Act 1996



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Section 9

Stay of legal proceedings

(1) A party to an arbitration agreement against whom legal proceedings are brought (whether by way of claim or

counterclaim) in respect of a matter which under the agreement is to be referred to arbitration may (upon

notice to the other parties to the proceedings) apply to the court in which the proceedings have been brought

to stay the proceedings so far as they concern that matter.

(2) An application may be made notwithstanding that the matter is to be referred to arbitration only after the

exhaustion of other dispute resolution procedures.

(3) An application may not be made by a person before taking the appropriate procedural step (if any) to

acknowledge the legal proceedings against him or after he has taken any step in those proceedings to an-

swer the substantive claim.

(4) On an application under this section the court shall grant a stay unless satisfied that the arbitration agreement

is null and void, inoperative, or incapable of being performed.

(5) If the court refuses to stay the legal proceedings, any provision that an award is a condition precedent to the

bringing of legal proceedings in respect of any matter is of no effect in relation to those proceedings.

Section 12

Power of court to extend time for beginning arbitral proceedings

(1) Where an arbitration agreement to refer future disputes to arbitration provides that a claim shall be barred, or

the claimant’s right extinguished, unless the claimant takes within a time fixed by the agreement some step—

(a) to begin arbitral proceedings, or

(b) to begin other dispute resolution procedures which must be exhausted before arbitral proceedings can

be begun,

the court may by order extend the time for taking that step.

(2) Any party to the arbitration agreement may apply for such an order (upon notice to the other parties), but only

after a claim has arisen and after exhausting any available arbitral process for obtaining an extension of time.

(3) The court shall make an order only if satisfied—

(a) that the circumstances are such as were outside the reasonable contemplation of the parties when they

agreed the provision in question, and that it would be just to extend the time, or

(b) that the conduct of one party makes it unjust to hold the other party to the strict terms of the provision in

question.

(4) The court may extend the time for such period and on such terms as it thinks fit, and may do so whether or

not the time previously fixed (by agreement or by a previous order) has expired.

(5) An order under this section does not affect the operation of the Limitation Acts (see section 13).

(6) The leave of the court is required for any appeal from a decision of the court under this section.

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Section 24

Power of the court to remove arbitrator

(1) A party to arbitral proceedings may (upon notice to the other parties, to the arbitrator concerned and to any

other arbitrator) apply to the court to remove an arbitrator on any of the following grounds—

(a) that circumstances exist that give rise to justifiable doubts as to his impartiality;

(b) that he does not possess the qualifications required by the arbitration agreement;

(c) that he is physically or mentally incapable of conducting the proceedings or there are justifiable doubts

as to his capacity to do so;

(d) that he has refused or failed—

(i) properly to conduct the proceedings, or

(ii) to use all reasonable despatch in conducting the proceedings or making an award, and that

substantial injustice has been or will be caused to the applicant.

(2) If there is an arbitral or other institution or person vested by the parties with power to remove an arbitrator,

the court shall not exercise its power of removal unless satisfied that the applicant has first exhausted any

available recourse to that institution or person.

(3) The arbitral tribunal may continue the arbitral proceedings and make an award while an application to the

court under this section is pending.

(4) Where the court removes an arbitrator, it may make such order as it thinks fit with respect to his entitlement

(if any) to fees or expenses, or the repayment of any fees or expenses already paid.

(5)The arbitrator concerned is entitled to appear and be heard by the court before it makes any order under this

section.


Section 33

General Duty of the tribunal

(1) The tribunal shall—

(a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting

his case and dealing with that of his opponent, and

(b) adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or

expense, so as to provide a fair means for the resolution of the matters falling to be determined.

(2) The tribunal shall comply with that general duty in conducting the arbitral proceedings, in its decisions on

matters of procedure and evidence and in the exercise of all other powers conferred on it.

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Section 45

Determination of preliminary point of law

(1) Unless otherwise agreed by the parties, the court may on the application of a party to arbitral proceedings

(upon notice to the other parties) determine any question of law arising in the course of the proceedings

which the court is satisfied substantially affects the rights of one or more of the parties.

An agreement to dispense with reasons for the tribunal’s award shall be considered an agreement to exclude

the court’s jurisdiction under this section.

(2) An application under this section shall not be considered unless—

(a) it is made with the agreement of all the other parties to the proceedings; or

(b) it is made with the permission of the tribunal and the court is satisfied—

(i) that the determination of the question is likely to produce substantial savings in costs, and

(ii) that the application was made without delay.

(3) The application shall identify the question of law to be determined and, unless made with the agreement of all

the other parties to the proceedings, shall state the grounds on which it is said that the question should be

decided by the court.

(4) Unless otherwise agreed by the parties, the arbitral tribunal may continue the arbitral proceedings and make

an award while an application to the court under this section is pending.

(5) Unless the court gives leave, no appeal lies from a decision of the court whether the conditions specified in

subsection (2) are met.

(6) The decision of the court on the question of law shall be treated as a judgment of the court for the purposes

of an appeal.

But no appeal lies without the leave of the court which shall not be given unless the court considers that the

question is one of general importance, or is one which for some other special reason should be considered

by the Court of Appeal.

Section 67

Challenging the award: substantive jurisdiction

(1) A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court—

(a) challenging any award of the arbitral tribunal as to its substantive jurisdiction; or

(b) for an order declaring an award made by the tribunal on the merits to be of no effect, in whole or in part,

because the tribunal did not have substantive jurisdiction.

A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in

section 70(2) and (3).

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(2) The arbitral tribunal may continue the arbitral proceedings and make a further award while an application to

the court under this section is pending in relation to an award as to jurisdiction.

(3) On an application under this section challenging an award of the arbitral tribunal as to its substantive jurisdic-

tion, the court may by order—

(a) confirm the award,

(b) vary the award, or

(c) set aside the award in whole or in part.


Section 68

Challenging the award: serious irregularity

(1) A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court

challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the pro-

ceedings or the award.

A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in

section 70(2) and (3).

(2) Serious irregularity means an irregularity of one or more of the following kinds which the court considers has

caused or will cause substantial injustice to the applicant—

(a) failure by the tribunal to comply with section 33 (general duty of tribunal);

(b) the tribunal exceeding its powers (otherwise than by exceeding its substantive jurisdiction: see section

67);

(c) failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the par-

ties;

(d) failure by the tribunal to deal with all the issues that were put to it;

(e) any arbitral or other institution or person vested by the parties with powers in relation to the proceedings

or the award exceeding its powers;

(f) uncertainty or ambiguity as to the effect of the award;

(g) the award being obtained by fraud or the award or the way in which it was procured being contrary to

public policy;

(h) failure to comply with the requirements as to the form of the award; or

(i) any irregularity in the conduct of the proceedings or in the award which is admitted by the tribunal or by

any arbitral or other institution or person vested by the parties with powers in relation to the proceedings

or the award.

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(3) If there is shown to be serious irregularity affecting the tribunal, the proceedings or the award, the court

may—

(a) remit the award to the tribunal, in whole or in part, for reconsideration,

(b) set the award aside in whole or in part, or

(c) declare the award to be of no effect, in whole or in part.

The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in

part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for

reconsideration.

The leave of the court is required for any appeal from a decision of the court under this section.

Section 69

Appeal on a point of law

(1) Unless otherwise agreed by the parties, a party to arbitral proceedings may (upon notice to the other parties

and to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings.

An agreement to dispense with reasons for the tribunal’s award shall be considered an agreement to ex-

clude the court’s jurisdiction under this section.

(2) An appeal shall not be brought under this section except—

(a) with the agreement of all the other parties to the proceedings, or

(b) with the leave of the court.

The right to appeal is also subject to the restrictions in section 70(2) and (3).

(3) Leave to appeal shall be given only if the court is satisfied—

(a) that the determination of the question will substantially affect the rights of one or more of the parties,

(b) that the question is one which the tribunal was asked to determine,

(c) that, on the basis of the findings of fact in the award—

(i) the decision of the tribunal on the question is obviously wrong, or

(ii) the question is one of general public importance and the decision of the tribunal is at least open to

serious doubt, and

(d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all

the circumstances for the court to determine the question.

(4) An application for leave to appeal under this section shall identify the question of law to be determined and

state the grounds on which it is alleged that leave to appeal should be granted.

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(5) The court shall determine an application for leave to appeal under this section without a hearing unless it

appears to the court that a hearing is required.

(6) The leave of the court is required for any appeal from a decision of the court under this section to grant or

refuse leave to appeal.

(7) On an appeal under this section the court may by order—

(a) confirm the award,

(b) vary the award,

(c) remit the award to the tribunal, in whole or in part, for reconsideration in the light of the court’s

determination, or

(d) set aside the award in whole or in part.

The court shall not exercise its power to set aside an award, in whole or in part, unless it is satisfied that it

would be inappropriate to remit the matters in question to the tribunal for reconsideration.

(8) The decision of the court on an appeal under this section shall be treated as a judgment of the court for the

purposes of a further appeal.

But no such appeal lies without the leave of the court which shall not be given unless the court considers that

the question is one of general importance or is one which for some other special reason should be

considered by the Court of Appeal.

Section 70

Challenge or appeal: supplementary provisions

(1) The following provisions apply to an application or appeal under section 67, 68 or 69.

(2) An application or appeal may not be brought if the applicant or appellant has not first exhausted—

(a) any available arbitral process of appeal or review, and

(b) any available recourse under section 57 (correction of award or additional award).

(3) Any application or appeal must be brought within 28 days of the date of the award or, if there has been any

arbitral process of appeal or review, of the date when the applicant or appellant was notified of the result of

that process.

(4) If on an application or appeal it appears to the court that the award—

(a) does not contain the tribunal’s reasons, or

(b) does not set out the tribunal’s reasons in sufficient detail to enable the court properly to consider the

application or appeal,

the court may order the tribunal to state the reasons for its award in sufficient detail for that purpose.

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(5) Where the court makes an order under subsection (4), it may make such further order as it thinks fit with

respect to any additional costs of the arbitration resulting from its order.

(6) The court may order the applicant or appellant to provide security for the costs of the application or appeal,

and may direct that the application or appeal be dismissed if the order is not complied with.

The power to order security for costs shall not be exercised on the ground that the applicant or appellant is—

(a) an individual ordinarily resident outside the United Kingdom, or

(b) a corporation or association incorporated or formed under the law of a country outside the United King-

dom, or whose central management and control is exercised outside the United Kingdom.

(7) The court may order that any money payable under the award shall be brought into court or otherwise se-

cured pending the determination of the application or appeal, and may direct that the application or appeal be

dismissed if the order is not complied with.

(8) The court may grant leave to appeal subject to conditions to the same or similar effect as an order under

subsection (6) or (7).

This does not affect the general discretion of the court to grant leave subject to conditions.

Section 93 Appointment of judges as arbitrators

(1) [An eligible High Court judge]1 or an official referee may, if in all the circumstances he thinks fit, accept ap-

pointment as a sole arbitrator or as umpire by or by virtue of an arbitration agreement.

(2) [An eligible High Court judge]2 shall not do so unless the Lord Chief Justice has informed him that, having

regard to the state of business in the High Court and the Crown Court, he can be made available.

(3) An official referee shall not do so unless the Lord Chief Justice has informed him that, having regard to the

state of official referees' business, he can be made available.

(4) The fees payable for the services of [an eligible High Court judge]3 or official referee as arbitrator or umpire

shall be taken in the High Court.

(4A) [The Lord Chief Justice may nominate a senior judge (as defined in section 109(5) of the Constitutional

Reform Act 2005) to exercise functions of the Lord Chief Justice under this section.]4

(5) In this section—

“arbitration agreement” has the same meaning as in Part I ; [...]

___________________________________

1 Words in s. 93(1) substituted (20.2.2019) by Courts and Tribunals (Judiciary and Functions of Staff) Act 2018 (c. 33), ss. 1(6)(a), 4(2)

2 Words in s. 93(2) substituted (20.2.2019) by Courts and Tribunals (Judiciary and Functions of Staff) Act 2018 (c. 33), ss. 1(6)(a), 4(2)

3 Words in s. 93(4) substituted (20.2.2019) by Courts and Tribunals (Judiciary and Functions of Staff) Act 2018 (c. 33), ss. 1(6)(b), 4(2)

4 S. 93(4A) inserted (20.2.2019) by Courts and Tribunals (Judiciary and Functions of Staff) Act 2018 (c. 33), ss. 1(6)(c), 4(2)

5 Word in s. 93(5) omitted (20.2.2019) by virtue of Courts and Tribunals (Judiciary and Functions of Staff) Act 2018 (c. 33), ss. 1(6)(d)(i), 4(2)

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["eligible High Court judge" means—

(a) a puisne judge of the High Court, or

(b) a person acting as a judge of the High Court under or by virtue of section 9(1) of the Senior Courts Act

1981;] 6

“official referee” means a person nominated under [section 68(1)(a) of the Senior Courts Act 1981] 7 to deal

with official referees' business.

(6) The provisions of Part I of this Act apply to arbitration before a person appointed under this section with the

modifications specified in Schedule 2.

Section 101

Recognition and enforcement of awards

(1) A New York Convention award shall be recognised as binding on the persons as between whom it was

made, and may accordingly be relied on by those persons by way of defence, set-off or otherwise in any legal

proceedings in England and Wales or Northern Ireland.

(2) A New York Convention award may, by leave of the court, be enforced in the same manner as a judgment or

order of the court to the same effect.

As to the meaning of “the court” see section 105.

(3) Where leave is so given, judgment may be entered in terms of the award.

Section 103

Recognition and enforcement of awards

(1) Recognition or enforcement of a New York Convention award shall not be refused except in the following

cases.

(2) Recognition or enforcement of the award may be refused if the person against whom it is invoked proves—

(a) that a party to the arbitration agreement was (under the law applicable to him) under some incapacity;

(b) that the arbitration agreement was not valid under the law to which the parties subjected it or, failing any

indication thereon, under the law of the country where the award was made;

(c) that he was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings

or was otherwise unable to present his case;

(d) that the award deals with a difference not contemplated by or not falling within the terms of the submis-

sion to arbitration or contains decisions on matters beyond the scope of the submission to arbitration

(but see subsection (4));

___________________________________

6 Words in s. 93(5) inserted (20.2.2019) by Courts and Tribunals (Judiciary and Functions of Staff) Act 2018 (c. 33), ss. 1(6)(d)(ii), 4(2)

7 Words in s. 93(5) substituted (1.10.2009) by Constitutional Reform Act 2005 (c. 4), ss. 59(5), 148(1), Sch. 11 para. 1(2); S.I. 2009/1604, art. 2(d)

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(e) that the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the

agreement of the parties or, failing such agreement, with the law of the country in which the arbitration

took place;

(f) that the award has not yet become binding on the parties, or has been set aside or suspended by a

competent authority of the country in which, or under the law of which, it was made.

(3) Recognition or enforcement of the award may also be refused if the award is in respect of a matter which is

not capable of settlement by arbitration, or if it would be contrary to public policy to recognise or enforce the

award.

(4) An award which contains decisions on matters not submitted to arbitration may be recognised or enforced to

the extent that it contains decisions on matters submitted to arbitration which can be separated from those on

matters not so submitted.

(5) Where an application for the setting aside or suspension of the award has been made to such a competent

authority as is mentioned in subsection (2)(f), the court before which the award is sought to be relied upon

may, if it considers it proper, adjourn the decision on the recognition or enforcement of the award.

It may also on the application of the party claiming recognition or enforcement of the award order the other

party to give suitable security.

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Arbitration Team



David Breslin

Partner

E: [email protected]

T: +44 20 3036 7274

M: +44 7980 744 733

Mark Buckley

Partner


T: +44 20 3036 7266

M: +44 7767 252 321

Eugene Matveichuk

Partner


T: +44 20 3036 7247

M: +44 7917 839 093

David Weare

Partner


T: +44 20 3036 7333

M: +44 7771 725 507

Alexander Wildschütz

Partner


T: +44 20 3036 7286

M: +44 7852 040 586

Simon Ekins

Partner


T: +44 20 3036 7264

M: +44 7788 754 204

Tom Bolam

Senior Associate


T: +44 20 3036 7227

M: +44 7852 040561

Christian Charles

Senior Associate


T: +44 20 3036 7293

M: +44 7507 481050

Anne McMahon

Senior Associate


T: +44 20 3036 7366

M: +44 7973 771 745

Frances Jenkins

Associate


T: +44 20 3036 7131

M: +44 7507 480994

Victoria Prince

Associate


T: +44 20 3036 7118

M: +44 7773 484280

Digby Hebbard

Partner


T: +44 20 3036 7209

M: +44 7971 236654

Fladgate LLP - 2019

www.fladgate.com Tel: +44 20 3036 7000 | Fax: +44 20 3036 7600

Fladgate LLP 16 Great Queen Street London WC2B 5DG United Kingdom