A recent Thai Cabinet resolution relaxes the restriction on arbitration clauses in some public contracts. The resolution is seen as a positive move for arbitration and investment in Thailand, but more remains to be done.
The New Cabinet Resolution
On 14 July 2015, the Thai Cabinet passed a resolution (the "2015 Resolution") amending a 2009 resolution (the "2009 Resolution") which prohibited the inclusion of arbitration clauses in all contracts entered into by private contracts with the public sector unless approved by the Cabinet on a case-by-case basis.
Under the 2015 Resolution, Cabinet approval for arbitration clauses will now only be required for three types of contract, as explained further below.
Although a Cabinet resolution is a statement of government policy and does not have the binding status of a law, decree or regulation, in practice Cabinet resolutions will be followed by all of those affected. In this case, all Thai ministries, government departments and other public bodies were notified of the 2015 Resolution on 17 July 2015.
In a decision dated 5 May 2015 (Cass. Com. 5 mai 2015, 14-16.644, available at: https://www.courdecassation.fr/jurisprudence_2/chambre_commerciale_574/424_5_31676.html) concerning French domestic arbitration law, the French Supreme Court (Cour de cassation) accepted, for the first time, that a joint guarantor could challenge an arbitral award rendered in a dispute between a debtor and its creditor which determined the amount due to the latter. While the French Code of civil procedure already allowed, under certain conditions, a non-party to French domestic arbitration proceedings to challenge the resulting award by a specific procedure called third party opposition (tierce opposition), this procedure was not available to a joint guarantor until this decision.
On 20 November 2015, the Hong Kong International Arbitration Centre (HKIAC) announced the opening of a representative office in Shanghai.
The HKIAC's on-the-ground presence in Shanghai is an important milestone for China-related arbitration, as it is the first time that an offshore institution has set up in the mainland. It is clear from the HKIAC's announcement that its ambitions in Shanghai are broad, including working with mainland arbitration commissions to promote international best practices and facilitating the development of PRC arbitration law. In connection with its office in Shanghai, the HKIAC also announced plans to work closely with courts and judges to enhance the understanding of arbitration in mainland China, and to provide professional training to Chinese arbitrators and practitioners. HKIAC's Shanghai office will also provide logistical support for arbitration hearings taking place in the mainland.
In a press release, HKIAC made clear that its Shanghai office does not provide case administration services, which will continue to be provided by the HKIAC Secretariat in Hong Kong. HKIAC's opening in Shanghai comes at a time of uncertainty around the administration of foreign-related arbitrations seated in mainland China by offshore arbitration institutions. The prevailing view, until recently, was that an agreement to arbitrate a foreign-related dispute in mainland China under the administration of an arbitral institution that is not a registered mainland arbitration commission – for example, the ICC or HKIAC – was invalid under Chinese law. However, in 2014, it was revealed that the Supreme People's Court decided in the "Longlide" case (covered by HSF Arbitration Notes here) that an arbitration clause providing for arbitration of a foreign-related dispute in Shanghai under the ICC Rules was valid.
A recent case in the English High Court (the Court) demonstrates the need to act promptly when seeking an anti-suit injunction in relation to proceedings in a foreign court. The claimant, Essar Shipping Ltd (ESL) sought an anti-suit injunction in respect of proceedings brought by the respondent, Bank of China Ltd (the Bank) in the Qingdao court in China (the Qingdao Proceedings) on the basis that the subject matter of the dispute was subject to a London-seated arbitration agreement. ESL also sought a declaration that the arbitration agreement was valid and damages for breach of the arbitration agreement.
The Court granted the declaration sought on the basis that, on the Bank’s case, the dispute was subject to the arbitration agreement. ESL was also allowed to proceed with its claim for damages. However, the Court refused to grant the anti-suit injunction. ESL had objected to the jurisdiction of the court in the Qingdao Proceedings but had not brought the application for an anti-suit injunction promptly.
Parties intending to seek interim relief should take note of the Court’s emphasis on the requirement of promptness. This is the key factor, not whether it is reasonable to apply to the foreign court first to object to jurisdiction, or whether there will be a long delay in the foreign court.
Notably, whilst the point was not relevant in this case, the Court suggested that anti-suit injunctions cannot be granted in respect of proceedings in another EU Member State Court under the Recast Brussels Regulation.
In its judgment in IPCO (Nigeria) Limited v Nigerian National Petroleum Corporation (No.3)  EWCA Civ 1144 & 1145, handed down on 10 November 2015, the Court of Appeal considered whether the Appellant ("IPCO") was entitled to enforce an arbitration award made against the Respondent ("NNPC") in Nigeria in October 2004 (the "Award").
In this significant decision, the Court of Appeal ordered that IPCO should be able, in principle, to enforce the Award, notwithstanding the existence of challenges to it in Nigeria, given the very significant delay in resolving those challenges before the Nigerian courts. On the facts of this case, the Court of Appeal considered that the alternative result (of yet further adjournment) would, in commercial terms, be absurd and inconsistent with the principles underpinning the New York Convention.
Yesterday, 12 November, the EU formally presented its proposed language for the Investment Chapter of the TTIP to the US. As discussed in our earlier blog piece here, the EU is suggesting an "Investment Court System" to resolve disputes between investors and states under the TTIP.
The 12 November text is very similar to that seen in the previous draft, with a number of small changes. These changes include (but are not limited to):
Filed under EU, TPP, TTIP
In the recent judgment of National Housing Trust v YP Seaton & Associates Co Ltd ( UKPC 43), the Judicial Committee of the Privy Council (the "Privy Council") found that an arbitrator's award of compound interest should be set aside and remitted to the arbitrator because the arbitrator had no power under the law of the seat (Jamaica) to award compound interest. This judgment illustrates the importance of considering, including at the contract drafting stage, whether the law of the seat permits compound interest in the absence of party agreement.
Andrew Cannon, Partner in our International Arbitration and Public International Law practices has posted a short video on our Public International Law Notes blog on "State immunity and waiver of immunity issues in English law". Andrew discusses the restrictive doctrine of immunity enshrined in the English State Immunity Act 1978 and describes the steps a party should take in dealing with a state to ensure an effective of waiver in respect of jurisdiction and enforcement. To view the video, please click here.
Subscribers to our Arbitration Notes blog may also wish to subscribe to our Public International Law Notes blog for regular updates, analysis and comment on state immunity, investment treaty cases, investment protection, free trade agreements and other public international law issues. To subscribe to the Public International Law Blog, please click here, and enter your email in the “subscribe” box.
The Indian Government has taken steps to implement long awaited arbitration reforms by promulgating an ordinance, the Arbitration and Conciliation (Amendment) Ordinance, 2015 (the "Ordinance"), amending the Arbitration and Conciliation Act 1996 (the "Act"). These amendments have been on the cards for almost a year and the Government was earlier contemplating following the usual route of obtaining legislative approval for amending the Act. However, in light of the Modi Government's agenda to improve the ease of doing business in India, it is not surprising that the Government has opted for introducing an ordinance. Although the Ordinance is effective immediately, it will need Parliamentary approval in the upcoming session. The Ordinance largely follows the proposals set forth in a report of the Law Commission of India published last year.
New Zealand released the full text of the TPP to the public today 5 November. The text can be found here.
We will follow up with further consideration of the investment chapter in due course.
For further information, please contact Donald Robertson, Partner, Laurence Shore, Partner, Vanessa Naish, Professional Support Consultant, Hannah Ambrose, Professional Support Consultant or your usual Herbert Smith Freehills contact.
Vanessa NaishProfessional Support ConsultantEmail
+44 20 7466 2112
Hannah AmbroseProfessional Support ConsultantEmail
+44 20 7466 7585
Please also tag both with TPP, Investment Treaty.