Herbert Smith Freehills partner Christian Leathley speaks to Law360 for an exclusive Q&A on his career as a leading practitioner in international arbitration. Christian covers a range of topics including the growing problem with "issue conflict" in investment arbitration, how he came to focus on Latin America and receiving resumes that look like Ban Ki-moon's.
New York-based partner Christian Leathley speaks to Law360 for a Q&A on trends and challenges in international arbitration
In Wing Bo Building Construction Company Limited v Discreet Limited (HCA 146/2015) the Hong Kong Court of First Instance ("CFI") has upheld the constitutionality of s.20(8) Arbitration Ordinance, which provides that CFI decisions to stay proceedings in favour of arbitration are not subject to appeal. This decision follows the Court of Appeal ("CA") decision in China International Fund Limited v Dennis Lau & Ng Chun Man Architects & Engineers (HK) Limited v Secretary for Justice, [link to our blog post] which upheld the constitutionality of the limits on appeal in s.81(4) of the Arbitration Ordinance. That section requires leave from the CFI to appeal its decision on setting aside an arbitral award.
The Hong Kong Court of First Instance has confirmed the test under s.89(5) Arbitration Ordinance for granting security for the award, pending an application to set aside the award at the seat. The court held that same test applies where an applications to set aside a CFI order granting leave to enforce the awards is pending under O.73, r. 10A Rules of the High Court. In applying the test, Mimmie Chan J reiterated the CFI's well-established stance in support of arbitration, namely that the Court's "primary aim" under the Arbitration Ordinance is to "facilitate the arbitral process" and "to treat the arbitral award as final."
Dana Shipping and Trading SA v Sino Channel Asia Ltd  HKEC 599. Click here for a copy of the judgment.
Hong Kong CFI stays proceedings in favour of arbitration notwithstanding defendant’s submission to Hong Kong courts; upholds arbitration agreement contained in related contract
The Hong Kong CFI has stayed a claim under a deed of guarantee pending arbitration on the basis of an arbitration agreement in a Subscription Agreement containing the guaranteed obligations (Bluegold Investment Holdings Ltd v Kwan Chun Fun Calvin  HKEC 532) – notwithstanding a non-exclusive choice of the Hong Kong courts in the Guarantee. Applying established authority, Mimmie Chan J concluded that it was not "clear" that the dispute was outside the scope of the arbitration agreement (to the contrary, it was arguable the claim was within the scope of the arbitration agreement) and therefore stayed the claim. The court again ordered that the claimant in the Hong Kong proceedings pay costs on an indemnity basis, justified by the claimant's failure to comply with the arbitration agreement.
This decision is a warning to consider the full suite of documents when drafting choice-of-venue clauses in a multi-contract relationship. Unless there is clear provision to the contrary (potentially an exclusive jurisdiction agreement) in the contract generating the claim, the Hong Kong courts will likely stay proceedings in favour of an arbitration agreement between the same parties.
Court of Appeal clarifies the English Court’s jurisdiction under section 67 of the Arbitration Act: the Court is not required to make any order at all even if the application is well-founded
The recent decision of the English Court of Appeal in Integral Petroleum SA v Melars Group Limited considers the jurisdiction of the court under s67 of the English Arbitration Act 1996 (the Act). S67 deals with challenges to an arbitral award on the grounds of want of substantive jurisdiction. S67(3) provides that on an application by a party to an award, the court may: confirm the award; vary the award; or set aside the award in whole or in part.
The Court of Appeal made clear that the permissive nature of the word "may" in s67(3) makes it open for a judge to decide to make no order, for good reason, on any application under s67.
The Court of Appeal also held that it has no jurisdiction to grant permission to appeal the order of the lower court. Permission to appeal must be granted by the lower court itself.
Herbert Smith Freehills Partners Dominic Roughton and Andrew Cannon have given an interview to Lexis Nexis on the development of the English law of state immunity and diplomatic immunity following the English court's decision in Attiya v Jaber Al Thani  EWHC 212 (QB). The article can be found on our Public International Law Notes blog.
Herbert Smith Freehills Adds Dr Patricia Nacimiento as Partner to its International Arbitration offering in Frankfurt
Herbert Smith Freehills announced that international arbitration heavyweight Dr Patricia Nacimiento will join its partnership. Patricia will join the firm from Norton Rose Fulbright on 9 May 2016.
She has spent the last 20 years developing a reputation as a leading International Arbitration practitioner specialising in both commercial and investment treaty arbitrations, acting as counsel and arbitrator.
As a party representative, she has conducted over 120 arbitration proceedings under the rules of numerous arbitration institutions.
The German government appointed her as of 2008 to the panel of arbitrators at the International Centre for Settlement of Investment Disputes (ICSID). She is also regularly appointed as an arbitrator and has led numerous international ICC, DIS and ad hoc arbitration proceedings as a chairperson, sole arbitrator or party appointed arbitrator.
Patricia is a native German speaker and fluent in English, Spanish, Italian and French. She is co-editor of leading manuals on arbitration and lecturer at the Universities of Heidelberg and Frankfurt.
Her experience will further complement our leading International Arbitration practice, which has just been ranked third busiest in the world by Global Arbitration Review (GAR) with the highest number of individual partner rankings. This is a high-profile endorsement of the strength and growth of the firm's global practice and the talent of its teams around the world.
Showcased by the publication as “a class act”, the firm's International Arbitration practice has a network of over 30 partners across the firm’s offices, spanning 24 offices in the US, UK, Europe, the Middle East, Asia and Australia. The practice represents clients worldwide, ranging from Fortune 500, multinationals to financial institutions, governments and state-owned entities.
Justin D'Agostino, Global Head of Herbert Smith Freehills Disputes Practice, said:
"Patricia brings with her a breadth of experience, which will further strengthen our leading International Arbitration practice and the continued expansion of our Disputes Offering in EMEA. I am very excited to welcome her on board."
Paula Hodges Q.C., Head of the Herbert Smith Freehills' Global Arbitration Practice, adds:
"We are very much looking forward to welcoming Patricia to our market-leading global international arbitration team. The breadth and depth of experience she brings will further complement our strong global practice and highlights our desire to further expand and grow our EMEA capabilities."
Ralf Thaeter, Managing Partner of Herbert Smith Freehills Germany commented:
"We are very pleased to welcome Patricia to our practice in Germany. Since establishing in 2013, our partnership has now grown to 11 and Patricia is a great addition to our German disputes team, alongside partners Thomas Weimann and Mathias Wittinghofer. Her arrival is a testament to our commitment to growth in Germany."
Patricia added: "I am thrilled to join Herbert Smith Freehills. It is a disputes power house with dedicated experts all over the globe. I look forward to being part of the further dynamic in Germany."
Video post in â€śObservations on Arbitrationâ€ť series: â€śAn introduction to the Fair & Equitable Treatment Standardâ€ť
In this video post in the “Observations on Arbitration” series, Christian Leathley provides an Introduction to the Fair and Equitable Treatment (FET) Standard in investment arbitration. Christian discusses the circumstances in which the FET standard has been applied, and the key elements of the FET standard, as developed by tribunals in investment arbitrations.
The video posts can be downloaded to your computer for offline viewing.
English Court identifies “weaknesses” in the 2014 IBA Guidelines on Conflicts of Interest when considering challenge of an Award for apparent bias
In the case of W Limited v M SDN BHD  EWHC 422 (Comm) the Claimant, W Limited, sought to challenge two awards in the English Court for serious irregularity under s68(2) of the Arbitration Act 1996. The challenge was founded on apparent bias of the arbitrator based on an alleged conflict of interest. No actual bias was alleged.
The case has wider importance for the international arbitration community because the Claimant referenced the 2014 IBA Guidelines on Conflicts of Interest in International Arbitration (IBA Guidelines) to substantiate its position, in particular, paragraph 1.4 of the Non-Waivable Red List.
Having applied the English law test for apparent bias and considered the IBA Guidelines, the English Court identified a number of "weaknesses" in the IBA Guidelines. This included the inability of parties or arbitrators to apply "case-specific judgment" to a Non-Waivable Red List situation. The court also commented that the conflict situation identified in this case was, in many respects, less serious than some of those identified in the Waivable Red List. Despite the conflict situation falling squarely within paragraph 1.4 of the Non-Waivable Red List, the court concluded that there was no apparent bias and dismissed the challenge.
Herbert Smith Freehills' Global Arbitration Practice has been showcased as being the third busiest in the world as part of the prominent annual Global Arbitration Review (GAR) 30 rankings, rising five places from last year.
The firm's new GAR 30 ranking appears in the ninth edition of the GAR 100, which was unveiled yesterday (2 March 2016) at the sixth annual GAR Awards at the Mandarin Oriental hotel in Shanghai.