U.S. Supreme Court’s First Opinion of 2019: Kavanaugh Favours Arbitrators’ Power to Decide Arbitrability

The U.S. Supreme Court’s first opinion of 2019, written by recently appointed Justice Brett Kavanaugh, confirms the long-standing support of the Court for arbitrators to decide the issues of arbitrability of a dispute submitted to arbitration.  The unanimous ruling defends the provisions of the Federal Arbitration Act, confirming that a contract’s terms control who decides, in the first instance, whether a dispute is subject to arbitration.

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Recent Developments in India-related International Arbitration

Herbert Smith Freehills has issued the latest edition of its Indian international arbitration e-bulletin.

In this issue we consider various court decisions, which cover issues such as the applicability of the Arbitration Amendment Act 2015, binding non-signatories to an award, enforcement of an award before the National Company Law Tribunal, and the continued pro-arbitration approach of the Indian courts. In other news, we consider the continued rise of institutional arbitration in India, a detailed analysis of the proposed amendments to the Arbitration Act, as well as India-related bilateral investment treaty news (and other developments).

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West Tankers principle unaffected by Recast Brussels Regulation; mandatory foreign jurisdictional rules do not encroach on scope of widely worded arbitration clause

In Nori Holdings Limited et al v PJSC Bank Okritie Financial Corporation [2018] EWHC 1343 (Comm) the English court has applied the Recast Brussels Regulation, finding that the West Tankers principle remains applicable and, as a consequence, refused to grant an anti-suit injunction in relation to parallel EU court proceedings.

At the same time, it found alleged Russian mandatory jurisdictional rules referring an insolvency dispute to the Moscow Arbitrazh Court insufficient to displace the wide and general wording of an arbitration clause, with the result that it granted an anti-suit injunction in relation to non-EU proceedings. Continue reading

Hong Kong judge defers to arbitration in dismissing winding up petition

In a recent Court of First Instance case before Harris J, Southwest Pacific Bauxite (HK) Ltd (Company) sought to strike out a winding-up petition issued against it by Lasmos Ltd (Petitioner). The ground of insolvency relied on by the Petitioner was a statutory demand of US$259,700.48 (Debt), arising out of a management services agreement (MSA) between the Company and the Petitioner (Parties). The Company disputed the Debt.

The issue in this case was the impact of the arbitration clause in the MSA on the exercise of the court’s discretion to make a winding-up order.
Lasmos Ltd v Southwest Pacific Bauxite (HK) Ltd [2018] HKCFI 426

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Arbitration: its growth, practical uses and limitations in an employment law context

There is a growing appetite to resolve employment disputes by arbitration.  This is the finding of the UK Employment Lawyers Association (ELA) which published its Report on Arbitration and Employment Disputes in November 2017.  The Report, a product of over two years of research, conducted by ELA’s Arbitration and ADR Group (chaired by Peter Frost of HSF and Paul Goulding QC of Blackstone Chambers), concludes that arbitration clauses are increasingly found in partnership and LLP agreements, deferred remuneration scheme rules and contracts of employment.

The Report notes the development of the European Employment Lawyers Association (EELA) arbitration scheme, including EELA’s bespoke arbitration rules, a model arbitration clause and a submission agreement (prepared with the assistance of Hannah Ambrose of HSF) under which existing disputes can be resolved by arbitration. Interestingly, the Report encourages the adaptation of the EELA’s documentation to provide the materials for a truly bespoke dispute resolution process for UK employment contracts.

In addition, the ELA intends to bolster its training programme by including sessions focusing on arbitration and its applications. The goal is twofold. First, ELA seeks to provide practical education to those involved in drafting and negotiating employment contracts and those litigating employment disputes. Second, this initiative will help to develop a pool of specialised arbitrators, advocates and advisers.  Such efforts will ensure appropriate use of arbitration in the context of an area that is tightly regulated by statute in many jurisdictions. Continue reading

Recent developments in India-related international arbitration

Herbert Smith Freehills has issued the latest edition of its Indian international arbitration e-bulletin. In this issue we will consider Indian court decisions, including the arbitrability of allegations of fraud and non-arbitrability of trust disputes by the Supreme Court. We have also considered various decisions in which the Delhi High court shows restraint in relation to interfering with offshore arbitrations, while also making decisions that demonstrate the observance of formalities by the court which could be construed as not pro-arbitration, including refusing to enforce an arbitration clause in an unsigned agreement. In other news, we consider the rise of institutional arbitration in India and India-related bilateral investment treaty news. Further, we discuss the imminent launch of a new edition of our Guide on India-Related Contracts Dispute Resolution.

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Hong Kong confirms IP rights are arbitrable

Hong Kong has now enacted amendments to its Arbitration Ordinance (Cap. 609), clarifying that disputes over intellectual property rights (IPRs) may be resolved by arbitration and that it is not contrary to Hong Kong public policy to enforce arbitral awards involving IPRs.

The bill effecting the amendments, Arbitration (Amendment) Bill 2016 (Bill), was first introduced in December 2016 and was passed in substantially the same form on 14 June 2017. For more detail, see our previous blog post containing a summary of the main provisions of the Bill here. The amendments are due to come into operation on 1 October 2017.

This is a positive development that should progress the Hong Kong Government's stated aim of achieving an edge over other jurisdictions in the Asia-Pacific region as a venue for settling IPR disputes.

High Court confirms UNCITRAL Tribunal Award on jurisdiction

The High Court has confirmed an UNCITRAL Tribunal's Award on Jurisdiction, which rejected jurisdiction under an investment contract (Contract) and the 1994 Kazakh Law on Foreign Investment (FIL).

The Court placed particular emphasis on expert evidence of the principles of contractual interpretation under the Civil Code of the Republic of Kazakhstan.  It was not prepared to depart from these principles, which required a literal interpretation of the Contract and FIL.

Whilst the Court's reasoning differed in some respects from that of the Tribunal, it was broadly consistent with the Award on Jurisdiction. 

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Appointment of arbitrators: English Court grapples conflicting case law and clarifies relevant principles when asked to assist with appointments

In its decision in Silver Dry Bulk Company Limited v Homer Hulbert Maritime Company Limited [2017] EWHC 44 (Comm) the English Court has considered and clarified the principles which apply to an application under section 18 of the English Arbitration Act 1996 (the "Act").  Section 18 enables a party to apply to the court to exercise its powers to give directions as to the making of tribunal appointments or make the appointments itself.  The decision confirms, amid conflicting case law, that the applying party must establish a "good arguable case" that a tribunal would have jurisdiction to hear the case, and emphasises that any jurisdictional arguments remain matters for the tribunal to decide in accordance with the principle of kompetenz-kompetenz. The case is also a good reminder of the purpose of section 18, which only applies where there has been a complete failure of the appointment procedure agreed between the parties, and cannot be used to declare or confirm the validity of a tribunal's constitution.

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