We are delighted to share with you the latest issue of the publication from the Herbert Smith Freehills Global Arbitration Practice, Inside Arbitration.
In addition to sharing knowledge and insight about the markets and industries in which our clients operate, the publication offers personal perspectives of our international arbitration partners from across the globe.
Filed under Africa, Arbitration rules, Asia, Construction, Europe, Investment Arbitration, New York Convention, News, Publications and Guides, South East Asia, The Americas
The London Court of International Arbitration (the LCIA) and the Government of Mauritius have announced the termination of their joint venture which established the LCIA-MIAC Arbitration Centre. LCIA-MIAC was created in 2011 as a focal point for international arbitration in Africa. In terminating the joint venture both the LCIA and the Government of Mauritius have nonetheless restated their commitment to international arbitration both in and in relation to Africa.
The termination will take effect from 27 July 2018. Parties to contracts should not include provisions for LCIA-MIAC arbitration in their arbitration agreements after this date.
In Reliance Industries Limited & Ors v The Union of India  EWHC 822 (Comm) the English commercial court (the Court) considered a number of challenges to parts of an arbitration award brought under sections 67, 68 and 69 of the Arbitration Act 1996 (the Â Act).
The decision provides useful guidance regarding the requirements to be satisfied should a party wish to challenge an award due to a “serious irregularity” under the Act. In particular, the Court confirmed that the general duty under s33 of the Act to give each party a reasonable opportunity to present its case was satisfied if the “essential building blocks” of the tribunal’s analysis and reasoning were in play in relation to an issue, even where the argument (in this case on a point of construction) was not articulated in the way adopted by the tribunal.
In addition to the issues discussed in this blog post, the Court considered the foreign act of state doctrine. This challenge is discussed in a post on our Public International Law Notes blog here.
We are pleased to announce that we will be holding a seminar on resource nationalism on 13 September 2018.
In Leung Kwok Hung trading as Kaiser (M&E) Decoration Engineering Company v. Johnson Controls Hong Kong Limited [HCCT 56/2017], the Hong Kong Court of First Instance granted the Defendant’s application under s.20 of the Arbitration Ordinance, staying Court proceedings in favour of arbitration. In doing so, Justice Mimmie Chan noted that the principles for granting such a stay were clear and had not been disputed by the parties.
In light of the termination of the parties’ subcontract containing the arbitration clause, the Court reiterated that the arbitration agreement is separable from the underlying contract and confirmed that the matters in dispute between the parties relating to alleged breach, termination of contract and payment fell within the scope of the clause.
The White Paper published yesterday, “The Future Relationship between the United Kingdom and the European Union”, includes the UK Government’s proposal for the resolution of disputes between the UK and the EU under what the UK Government views as an “Association Agreement”. This Association Agreement would form the institutional framework for the relationship, with a number of separate agreements (the majority falling within this institutional framework), each covering different elements of economic, security and cross-cutting cooperation.
Under the institutional framework there would be a UK-EU Governing Body, and under that Governing Body and answerable to it, a Joint Committee which would be responsible for the effective and efficient administration of the agreements. The Joint Committee, “through regular and structured dialogue”, would seek to prevent disputes arising, or otherwise play a role in resolving them.
The White Paper emphasises the potential for resolution of disputes through dialogue and non-formal means. However, it also outlines a potential dispute resolution process to ensure that the obligations contained in the institutional framework and agreements can be enforced if needed.
In the case of Perkins Engines Company Limited v Mohammed Samih Hussein Ghaddar & Ghaddar Machinery Co. S.A.L  EWHC 1500 (Comm) the English Court was asked to issue an anti-suit injunction against court proceedings brought in Lebanon. The relevant dispute resolution clause between the parties provided for English court jurisdiction to the extent that “reciprocal enforcement procedures” exist between the United Kingdom and Lebanon, failing which, disputes were to be submitted to arbitration. The Court found that the ordinary and natural meaning of the words required the existence of a multilateral/ bilateral treaty facilitating reciprocal enforcement of judgments in the United Kingdom and Lebanon. Since no such treaty existed, an anti-suit injunction should be granted against the Respondents in respect of proceedings they had brought in Lebanon.
Herbert Smith Freehills has further strengthened its New York offering with the hire of Partner Peter Behmke, a leading litigator in the market.
Peter joins the firm from Curtis, Mallet-Prevost, Colt & Mosle, where he was a partner.
Lauded by the legal directories as a “rising star,” Peter has carved out a successful career as a commercial litigator, representing clients across a range of sectors in their most complex disputed matters, including in the areas of financial services, commercial contracts, commodities, securities, bankruptcy litigation, energy, fraud, breach of fiduciary duty and other business torts.
He has successfully represented clients in state and federal courts at the trial and appellate levels throughout the United States, as well as in domestic and international arbitrations under the auspices of the AAA, ICDR, ICC and CPR.
In the recent case of X v Y  EWHC 741 (Comm), the English High Court dismissed an application to set aside an arbitral award under s68 of the English Arbitration Act 1996 (the Act) on the basis that the claimant should have first exhausted all remedies available to it by applying to the tribunal for correction or clarification of the award under s57(3) of the Act.Â The Court found that a tribunal had power under Article 27.1 of the LCIA Rules 1998 to clarify ambiguity in the award, and that Article 27.1 did not, in any case, Â oust the tribunal’s equivalent power under s57(3) of the Act. The wording of Article 27.1 in the LCIA Rules 2014 now expressly refers to correcting any ambiguity.
The case is a useful reminder to unsuccessful parties to analyse quickly and thoroughly an award and to ensure that any available process under s57 is exhausted before an application is made under s68. In particular, those who consider that the tribunal’s award is deficient for failing to deal with all issues put to it should assess whether such a complaint may be dealt with under s57(3) as a failure to give (adequate) reasons.
Two key developments emerge from the long-running proceedings in Xiamen Xinjingdi Group Co Ltd v Eton Properties Ltd  2 HKLRD 1106 and Xiamen Xinjingdi Group Co Ltd v Eton Properties  HKCFI 910. The Hong Kong Court of Appeal (CA) has held that, when parties enter into an arbitration agreement, they make an implied promise that they will honour the terms of any subsequent arbitral award. If one party fails to honour the award, this may give rise to a separate cause of action at common law, for which the Hong Kong courts have jurisdiction to grant a full range of remedies, including damages. These proceedings also confirm that the Hong Kong Court of First Instance (CFI) has statutory powers to stay proceedings before it, pending the determination of an application for leave to appeal to the higher courts. Continue reading