In a judgment handed down on 19 February 2015 in the case of Malicorp Ltd v Government of the Arab Republic of Egypt and others, English Commercial Court judge Mr Justice Walker has refused to enforce a Cairo Regional Centre for International Commercial Arbitration award on two separate grounds: first, because the award was set aside by a decision of the Cairo Court of Appeal in 2012, and second, because the award granted remedies on a basis which was neither pleaded nor argued. Walker J also opted not to exercise his discretion under section 103 of the Arbitration Act 1996 to enforce the award in any event. In so doing, the English court has joined other national courts and an ICSID tribunal in dealing yet another blow to Malicorp’s efforts to recover from the Egyptian state.
English court refuses to enforce New York Convention Award that was set aside at the seat of arbitration and that granted remedies that were not pleaded
Paris Court of Appeal enforces award under ICSID Additional Facility Rules between Gold Reserve and Venezuela
Abstract: In RĂ©publique Bolivarienne du Venezuela c/ SociĂ©tĂ© Gold Reserve INC, Cour d’appel de Paris, PĂ´le 1 â€“ Chambre 1, RG NÂ° 14/21103, a judge sitting in the Paris Court of Appeal considered opposing applications regarding an award issued under the ICSID Additional Facility Rules, with one side seeking enforcement of the award and the other seeking a stay of enforcement.
A judge sitting in the Paris Court of Appeal has granted Gold Reserveâ€™s application for enforcement of an award issued under the International Centre for Settlement of Investment Disputes (ICSID) Additional Facility Rules. In doing so, the judge rejected Venezuelaâ€™s application for a stay of enforcement.
This decision is another example of the French courts adopting a robust approach to the enforcement of arbitral awards. While every case will turn on its facts, the decision is a clear indication that, in the absence of convincing evidence of serious prejudice to a party’s rights, a stay is unlikely to be granted â€“ even if the sums involved are significant. (RĂ©publique Bolivarienne du Venezuela c/ SociĂ©tĂ© Gold Reserve INC, Cour d’appel de Paris, PĂ´le 1 â€“ Chambre 1, RG NÂ° 14/21103.)
First Media, part of the Lippo Group and the unsuccessful defendant in a Singapore-seated arbitration, has failed to resist enforcement in Hong Kong of Awards that the Singapore Court of Appeal had previously refused to enforce because they were made without jurisdiction (Astro Nusantara International B.V. v PT First Media TBK HCCT 45/2010). First Media lost on two grounds, each of which is explained in more detail below.
In brief â€“ first, the 14 day period allowed for resisting enforcement had expired; First Media was fourteen months too late. The court did not extend the time limit. Second, even if the time limit had been extended, the Awards would be enforced notwithstanding the Tribunal’s lack of jurisdiction over the claimant companies, because of First Media’s breach of the good faith principle. Continue reading
Herbert Smith Freehills ranked as the 8th busiest arbitration practice in the world by Global Arbitration Review
We are delighted to announce that Herbert Smith Freehillsâ€™ International Arbitration practice has been ranked as the 8th busiest practices in the world according to the prestigious GAR 30 survey conducted byÂ Global Arbitration ReviewÂ (GAR).
GARâ€™s rankings of the worldâ€™s most active arbitration practices were revealed at the publicationâ€™s annual awards dinner in Washington on 25th February 2015.
GAR is one of the leading publications of the international arbitration community worldwide. Its annual awards as well as its law firm rankings â€“ GAR 30 and GAR 100 â€“ are the most closely watched in the field. The rankings are compiled from extensive information provided by law firms which includes the number of merits and jurisdictional hearings attended during the past two years; the number of settlements; the value of the firm’s portfolio of matters; the number of hours billed to arbitration; and the number of arbitral appointments each firmÂ receives.
The rankings also take into account the reputation of the firmâ€™s partners amongst the arbitral community in the peer-nominatedÂ Whoâ€™s Who of Commercial Arbitration. Herbert Smith Freehills is ranked 2ndÂ globally with a total of 14 notable arbitration specialists.
Head of the firmâ€™s Global Arbitration Practice, Paula Hodges Q.C., comments:
â€śOur international arbitration practice continues to go from strength to strength and we are delighted that our global expertise in international arbitration has been recognised yet again in the GAR 30 rankings this year.â€ť
For further information please contact Paula Hodges, Q.C.,Â or your usual Herbert Smith Freehills contact.
In its recent judgment in Sierra Fishing Company and others v Hasan Said Farran and others  EWHC 140 (Comm), the English Court granted an application to remove an arbitrator under s24 of the Arbitration Act 1996 (the “Act“), which provides that a party may “apply to the court to remove an arbitrator on [the grounds that] circumstances exist that give rise to justifiable doubts as to his impartiality“.
The Court, applying the relevant test as articulated by the House of Lords in Porter v Magill  and referring to the IBA Guidelines on Conflicts of Interest in International Arbitration (the “IBA Guidelines“), had no difficulty in finding that “the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased“. The Court’s decision provides helpful confirmation that it is the arbitrator’s duty to make voluntary disclosure to the parties of circumstances known to him which might give rise to justifiable doubts as to his impartiality, regardless of whatever steps may be available to the parties to discover their existence.Â Â The judgment also provides helpful guidance on the steps which a party may take without losing their right to object to an irregularity affecting the tribunal or proceedings under s73 of the Act.
For further information on the revised 2014 IBA Guidelines, published on 28 November 2014, see our blog post here.)
The European Parliament’s study on arbitration legal instruments and practice in the EU and Switzerland: a step towards a uniform European regime on arbitration?
Two weeks ago the European Parliamentâ€™s Policy Department for Citizens’ Rights and Constitutional Affairs published a broad study on the legal instruments and practice of arbitration across the European Union and Switzerland.Â This study was undertaken over the past year at the Brunel Centre for the Study of Arbitration and Cross-Border Investment and is based on academic research and the results of a large-scale survey of arbitration practitioners across the EU and Switzerland.
The primary goal of this study is “to portray accurately the actual diversity of arbitration law and practice across the European Union and Switzerlandâ€ť in order to â€śdiscuss the strengths and weaknesses of the law and practice observed” in each European jurisdiction. Â In doing so, it first examines the legal framework and practice of arbitration in each Member State. Â It then analyses specialised topics of arbitration such as commercial, consumer and online arbitration and finally it evaluates the involvement of EU Member States and the EU in investor-state arbitration.
The study also provides insights into and recommendations for potential future actions and reforms mainly to improve the interaction between arbitration and EU law. Whilst the purpose of this contribution is to guide the European Parliament in its future decisions regarding arbitration, it remains uncertain whether potential reforms on this topic are part of Europeâ€™s broader agenda. Continue reading
Remission or Set Aside for an arbitral award where a challenge for serious irregularity is made out before the English courts?
In the case of The Secretary of State for the Home Department and Raytheon Systems Limited  EWHC 311 (TCC) and  EWHC 4375 (TCC), the English Court has set aside an arbitral award for serious irregularity under s68(2)(d).
Mr Justice Akenhead found that the Tribunal in question had failed to consider two important issues (one of liability and another of quantum) such that a serious irregularity had occurred which had caused substantial injustice to the claimant. In a later hearing, the judge considered the appropriate relief for that serious irregularity, concluding that the case was one in which it was appropriate to set aside the Award and for the case heard by a new Tribunal.
The two decisions add to the relatively sparse caselaw on these two provisions of the Act. The first is one of very few to consider and make a finding of serious irregularity under s68(2)(d). In grappling with when it is “inappropriate” to remit a matter back to the original arbitral tribunal, the second decision provides helpful parameters for when set-aside is the correct relief for such a finding. Continue reading
The recast Brussels Regulation has introducedÂ significant changes to the EU rules on jurisdiction and the enforcement of judgments for proceedings commenced from 10 January 2015, as well as clarifying the scope of the exclusion of arbitration from the Brussels regime. Adam Johnson, Anna Pertoldi, Nicholas Peacock and Hannah Ambrose have published an article in PLC Magazine,Â The recast Brussels Regulation: Implications for commercial parties, which considers the key changesÂ and the areas in which uncertainty remains.
This article was first published in the January/February 2015 issue of PLC Magazine â€“ click here for the PLC magazine home page.
We have also published a â€śhandy client guideâ€ť to jurisdiction under the recast Brussels Regulation, featuring aÂ decision tree to help determine whether the English court will have jurisdiction over a dispute under the new rules. Click here to download a copy.
For further information, please contact Adam Johnson, Partner, Anna Pertoldi, Partner, Nicholas Peacock, Partner or Hannah Ambrose, Professional Support Lawyer, or your usual Herbert Smith Freehills contact.
Hannah AmbroseProfessional Support Lawyer
+44 20 7466 7585
Forthcoming Chatham House and Herbert Smith Freehills Symposium: “TTIP: shaping the future for investor-state dispute settlement” â€“ 4 March 2015
The proposed Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US, two of the world’s largest economies, is intended to remove trade barriers, create wealth and promote investment.Â On 13 January, the European Commission published the results of its public consultation on investment protection and investor-state dispute settlement (ISDS) in Â TTIP.Â Of the 150,000 responses, 97 per cent were negative.Â Critics have stated that the ISDS proposals would allow corporates to undermine regulation by governments in fields such as environmental protection. Â A further consultation is promised.
But why has ISDS in TTIP aroused such opposition?Â Can it be improved to strike a balance between investment protection and the right of governments to regulate?Â And, if TTIP is a blueprint for future free trade agreements (FTAs), what lies in store for this form of dispute resolution?
Chatham House in partnership with Herbert Smith Freehills are holding a symposium to bring together voices from across a broad range of stakeholders.Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
Sapfo Constantatos, Senior Group Legal Counsel, Dispute Resolution in the General Counsel’s Office, Standard Chartered Bank
Andrew Coop, Senior Legal Adviser, EU and International Trade, Department for Business, Innovation and Skills
Lorenzo Cotula, Principal Researcher, Law and Sustainable Development, International Institute for Environment and Development
Andrea Shemberg, Lead, Investment and Human Rights Project, London School of Economics; Legal Adviser to UN Secretary-Generalâ€™s Special Representative for Business and Human Rights (2007-11)
Christian Leathley, Partner, International Arbitration and Public International Law, Herbert Smith Freehills LLP, London
Andrew Cannon, Partner, International Arbitration and Public International Law, Herbert Smith Freehills LLP, London
For further information, please click here.
English court sets aside London-seated tribunal’s award where arbitration was “to be held in Hong Kong”
The English Commercial Court has set aside an award under section 67 of the Arbitration Act 1996 (the “English Act“), and declared that the tribunal was not properly constituted, in Shagang South -Asia (Hong Kong) Trading Co Ltd v Daewoo Logistics  EWHC 194 (Comm).
In his judgment dated 5 February 2015, Hamblen J found that the procedural law of the arbitration agreement (the curial law) was Hong Kong law, on the basis that the arbitration clause provided for arbitration “to be held in” Hong Kong and there was not clear wording or other contrary indicia sufficient to displace the prima facie conclusion that this carried with it an implied choice of Hong Kong law as the curial law.
This decision demonstrates that parties should ensure, if they wish to designate in their arbitration agreement a convenient geographical location for hearings to take place, that they are content for the procedural law applicable at that location to apply to their arbitration agreement. If they do not wish that location to be the seat of the arbitration (the lex arbitri), it will be necessary to make that clear in the drafting of the arbitration agreement.