English High Court removes arbitrator on the basis that he did not possess necessary qualifications

In Tonicstar Limited v Allianz Insurance and Sirius International Insurance Corporation [2017] EWHC 2753, the English High Court considered an application under Section 24 of the Arbitration Act 1996  (the Act) for the removal of an arbitrator on the basis that he did not satisfy the contractual stipulation as to relevant experience. This judgment is of particular interest given that questions of the removal of arbitrators do not often come before the courts (because they are, in institutional arbitration, typically decided by arbitral institutions so are not usually public). The Court decided to remove the arbitrator on the basis that he had experience of insurance and reinsurance law, rather than required experience in the business of insurance and reinsurance. This decision highlights the importance of the careful drafting of arbitration clauses which specify characteristics of an arbitrator.  It also serves as a reminder of the importance of precedent in the English judicial system.

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Filed under Arbitration Act 1996, Arbitration clauses, Arbitrators, Court intervention, Europe

The LCIA updates its guidance on the use of Tribunal Secretaries

The role of tribunal secretaries in arbitration is an important subject which generates a range of different views, often expressed in strong terms.  On 26 October 2017 the LCIA published its updated Notes for Arbitrators (the Notes). The update (contained within section 8 of the Notes) seeks to provide more detail and clarity on the LCIA’s approach to the role and use of tribunal secretaries. Of particular note is the LCIA’s strengthening of consent requirements, requiring the parties to specifically consent to the permissible tasks, remuneration and identity of a tribunal secretary.

In introducing the changes regarding tribunal secretaries, the LCIA has emphasised the two key themes of communication and consent.

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Filed under Arbitration proceedings, Arbitration rules, Europe, Institutions

ICC publishes note on early dismissal of manifestly unmeritorious claims or defences

On 30 October 2017, the International Chamber of Commerce (“ICC“) published guidance designed to provide greater clarity on the scope for “immediate dismissal of manifestly unmeritorious claims or defences” under Article 22 of the 2017 ICC Rules (the “Rules“). The updated practice note follows the introduction by several leading arbitral institutions of express ‘early dismissal’ provisions in their latest rules. The ICC did not follow this trend in March 2017, but confirms in its updated practice note that it considers that Tribunals’ general case management powers under Article 22 of the Rules already include such tools.

To read the practice note in full, please click here. Herbert Smith Freehills has produced a Step by Step Guide to Arbitration under the ICC Rules. To request a copy, please contact Arbitration.Info@hsf.com. Continue reading

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Filed under Arbitration proceedings, Arbitration rules, Europe, Institutions, News, Procedures in arbitration

ICC and KLRCA sign MoU to promote dispute resolution in Asia

On 1 November 2017, the Kuala Lumpur Regional Centre for Arbitration (KLRCA) and the International Court of Arbitration of the International Chamber of Commerce (ICC) signed a Memorandum of Understanding (MoU), agreeing to work together to promote dispute resolution in Asia.

The signing of the MoU will further enhance the relationship between the two institutions, on top of their previous collaborations such as the ICC-KLRCA International Arbitration Conference in 2016 and the 1st ICC-KLRCA Vis Pre Moot earlier this year. More collaboration on training and other joint programmes is anticipated as part of the two institutions’ efforts under the MoU to increase the profile of arbitration in the region and to promote and develop Malaysia as an arbitration-friendly seat for arbitration in Asia. The MOU also provides for KLRCA will to provide hearing space to ICC and its users.

There has been a steep increase in cases over recent years in Malaysia administered by the KLRCA. Additionally, the ICC recently announced the establishment of its case management office in Singapore. This MoU can is evidence of the two institutions’ plans to further expand their presence in the Asia region.

In another interesting development, KLRCA will be renamed the “Asian International Arbitration Centre” in 2018, to coincide with its 40th anniversary and as part of the KLRCA’s initiative to be the leading arbitration hub in Asia.

If you have questions or would like further information, please contact Peter Godwin (Managing Partner) of Herbert Smith Freehills’ Kuala Lumpur office or your usual Herbert Smith Freehills contact.

Peter Godwin
Peter Godwin
Managing Partner - Kuala Lumpur
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+60 327775104

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Filed under ADR, Asia, News

SIAC signs Memorandum of Understanding with the Institute of Modern Arbitration of the Russian Federation

The last two years have seen considerable development of Russian arbitration law and practice, with changes to Russian arbitration law intended to enhance Russia’s market reputation as an arbitration-friendly jurisdiction.  In a further development, it was recently announced that the Singapore International Arbitration Centre (SIAC) and the Institute of Modern Arbitration (IMA) of the Russian Federation have entered into a Memorandum of Understanding intended to support and promote the development of international arbitration in Singapore and Russia. Continue reading

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Filed under Institutions, News, Russia

Singapore High Court dismisses stay applications on basis of repudiatory breach of med-arb agreements

In Heartronics Corporation v EPI Life Pte Ltd and Others [2017] SGHCR 17, the Singapore High Court considered applications to stay proceedings pursuant to arb-med-arb clauses in the relevant agreements. The defendant had argued that even if attempts at mediation had failed, the arbitration agreement nevertheless remained separate and enforceable.  This decision – which rejected the stay application after finding a repudiatory breach of an integrated med-arb procedure – highlights the unitary nature of certain multi-tiered dispute resolution clauses, and provides helpful guidance on the circumstances in which an arbitration agreement may be rendered inoperative or incapable of being performed.

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Filed under ADR, Arbitration clauses, Arbitration laws, Asia

English Court rejects claim that notice of arbitration given in a foreign language is not proper notice

In a dispute between an English company and a Russian company, the English High Court (the Court) refused to set aside an order enforcing a Russian arbitration award on the grounds that the English company had not been given notice of the arbitration or the appointment of arbitrators. The English company claimed that a series of letters in Russian, informing it of the arbitration proceedings, did not constitute proper notice as they were not provided with an English translation. However, as the headings of the letters were in English and contained the English word “arbitration”, and related to a contract in which the company had agreed to Russian language arbitration, the Court held that the English company ought to have known that the documents related to arbitration, and that the letters therefore constituted a valid notice.  The Court’s comments suggest that there are a number of practical steps that a party can take when beginning an arbitration against a counter-party which does business in a language different from that of the notice.  These are discussed further below.

Oao v Magneco Metrel UK Ltd [2017] EWHC 2208 (Comm)

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Filed under Arbitration proceedings, Challenges to awards, Enforcement, Enforcement - Europe, Europe, Russia

Event – The future of investment arbitration: have we reached a high water mark?

Herbert Smith Freehills and BIICL Investment Treaty Forum warmly invite you to attend ‘The Future of Investment Arbitration: Have We Reached a High Water Mark?’.

Date Wednesday 1 November 2017
Time 17:00: Registration
17:30: Panel discussion followed by drinks and networking
Venue Exchange House, Primrose Street, London, EC2A 2EG
Please click here to view map
Registration  Click here to register with the BIICL events team directly.
Please note there are a limited number of complimentary spaces.

 

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Filed under Events, Investment Arbitration, ISDS

Indian Supreme Court upholds English High Court’s decision on parties’ choice of London seat

The Indian Supreme Court’s judgment in Roger Shashoua v Mukesh Sharma sheds further light on the court’s approach to interpreting arbitration agreements, particularly regarding the parties’ implied choice of seat. The court found that the designation of London as the “venue” of the arbitration in the absence of any express designation of a seat would suggest that the parties agreed that London would be the seat of the arbitration (in the absence of anything to the contrary). It is also notable that the court expressly followed the English courts’ approach to the same question. Shashoua is particularly relevant to contracts with Indian parties providing for arbitration that were concluded prior to 6 September 2012, the date of the court’s judgment in Bharat Aluminium Co. v Kaiser Aluminium Technical Services Inc. (“BALCO“) (discussed here). As we consider in further detail below, this can have significant implications on the degree of Indian courts’ powers to interfere in arbitration proceedings, grant interim relief, appoint arbitrators or set aside an award, in connection with pre-BALCO agreements. Continue reading

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Filed under Arbitration clauses, Asia, India

The Federal Court of Australia recognises and enforces ICSID award

 

The Australian judiciary has again proven that Australia is a pro-arbitration destination, by recognising and enforcing an award and decision rendered under the rules of the International Centre for Settlement of Investment Disputes (ICSID). In Lahoud v The Democratic Republic of Congo [2017] FCA 982 (Lahoud), the Federal Court of Australia highlights that applicants can be confident that a foreign arbitral award will be recognised and enforced in Australia – even if it is against a foreign state.

Application for recognition

On 25 July 2017, Justice Gleeson of the Federal Court of Australia granted leave to the applicants in Lahoud to have the decisions of two ICSID tribunals recognised and enforced in Australia. The power to do so is enshrined in section 35(4) of the International Arbitration Act 1974 (Cth) (the Act). The two decisions in question were the original award and a decision on the request for annulment of the award (see ICSID Case No. ARB/10/4).

Background

The arbitration concerned an organisation operated by the applicants in the Democratic Republic of Congo (DRC), known as “IMPOREX”. The applicants leased their premises from a DRC government body, and sought damages for the alleged expropriation of their business premises and destruction of their property.

Having previously confirmed their jurisdiction to hear the dispute (on 16 February 2012), the arbitral tribunal consisting of three arbitrators delivered their award on 7 February 2014. The tribunal found that the respondent, the DRC, had violated various obligations under the New Investment Code of the DRC. In particular, the tribunal found that the DRC had breached the fair and equitable treatment and expropriation provisions of the New Investment Code. The respondent was ordered to pay the claimants USD$1.7 million in damages plus interest. The tribunal also determined that costs would largely be covered by the respondent.

Subsequently, the DRC unsuccessfully sought an annulment of the award, arguing that that the tribunal failed to provide reasons in parts of the award, and exceeded its power. On 29 March 2016, the annulment tribunal rejected the respondent’s entire application for annulment. Costs were again largely awarded against the respondent.

The Federal Court’s decision

In the decision of the Federal Court of Australia, Justice Gleeson provided a methodical illustration of the international arbitration framework in force in Australia, and the application of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the 1965 Convention on the Settlement of Investment Disputes, now ratified by 153 contracting states) (the Convention). Justice Gleeson explained that the Act aims to encourage the use of arbitration to resolve disputes involving international trade and commerce, to recognise and enforce foreign arbitral awards, and to give effect to the Convention, signed by Australia on 24 March 1975.

Justice Gleeson briefly explored the inclusive nature of the definition of an “award”, contained in section 31(1) of the Act. Her Honour highlighted that an award covers the interpretation, revision and annulment of an award. Owing to its inclusive nature, the ordinary and natural meaning of “award” therefore captured a decision refusing to annul an award. The decision rejecting the request for annulment in this matter was therefore included within the definition of “award”, and could be recognised and enforced.

Justice Gleeson found that all requirements under the Act and the Convention to recognise and enforce an award had been met. Having regard to the objectives of the Act, the benefits and finality of arbitration, Justice Gleeson recognised the two awards and made the orders sought by the applicants. The applicants were granted leave to have the ICSID award and decision recognised and enforced as if they were judgments of the Federal Court of Australia.

Comment

The recognition of this ICSID decision and award is a promising decision of the Federal Court of Australia. The decision affirms that Australia is an international arbitration friendly jurisdiction, and that organisations can be certain that arbitral awards properly made, will be effectively recognised and enforced in Australia.

Brenda Horrigan
Brenda Horrigan
Partner
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+61 2 9225 5536
Anne Hoffmann
Anne Hoffmann
Senior Associate
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+61 2 9225 5561
Sam Hall
Sam Hall
Solicitor
Email
+61 3 9288 1374

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Filed under ADR, Arbitration laws, Australia, Awards, Enforcement, ISDS, Regions