HKIAC signs cooperation agreement with Russia’s IMA

On 6 March 2018, the Hong Kong International Arbitration Centre (HKIAC) and the Institute of Modern Arbitration of the Russian Federation (IMA) signed a Cooperation Agreement that aims to support and promote the development of international arbitration and other dispute resolution options in Russia and Hong Kong.

This is a further development in HKIAC’s on-going efforts to meet growing demand in the Russian market for disputes to administered by established Asian arbitration institutions, such as HKIAC and the Singapore International Arbitration Centre (SIAC), which has signed a similar cooperation agreement with IMA.

In recent years, HKIAC has built up a panel of 30 Russian-speaking arbitrators, translated the HKIAC rules into Russian, and hosted and participated in a number of events in Russia. HKIAC has also announced that it is developing a new set of Administered Arbitration Rules, with innovative features “that will bring a new level of arbitration experience to users in Russia and other parts of the world”.

According to a recent survey by the Russian Arbitration Association, Russian users have indicated that Asian centres including SIAC, HKIAC and CIETAC are viable alternatives to the more traditionally-used European arbitral institutions such as ICC, SCC, LCIA and the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation (ICAC). In addition, the survey indicates that Singapore and Hong Kong are increasingly popular seats, and the laws of these jurisdictions are respectively the sixth and seventh most popular choices among the survey respondents.


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Filed under Arbitration rules, Asia, East Asia, Hong Kong & China, Institutions, Russia

English Court of Appeal reinstates the appointment of an arbitrator on the basis that he qualifies for appointment under the arbitration clause

In Allianz Insurance and Sirius International Insurance Corporation v Tonicstar Limited [2018] EWCA Civ 434, the English Court of Appeal has reversed the decision of the High Court on whether a party-appointed arbitrator met the contractual requirements as to requisite experience. The Court of Appeal held that that an English QC with experience of insurance and reinsurance law was sufficient to comply with a contractual clause requiring arbitrators to have “experience of insurance and reinsurance”.

This decision is of particular interest as such challenges to arbitrators rarely come before the courts. It highlights once again the importance of drafting arbitration clauses clearly, particularly where parties require their arbitrators to possess certain qualifications or experience.

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Filed under Arbitration Act 1996, Arbitration clauses, Arbitrators, Europe, Uncategorized

2017 ICC Dispute Resolution Statistics show steady growth

The ICC has recently published its preliminary 2017 statistics, showing a slightly lower case load than the record-breaking 2016, but still indicating a steady long term growth. A total of 810 new cases were filed in 2017, involving 2316 parties from a record 142 countries. These newly-registered cases represented an aggregate value in dispute of over US$30.85 billion, with an average amount in dispute of US$45 million. Overall, these numbers demonstrate ICC’s global reach and leading position for complex, high-value disputes.

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Filed under Arbitration proceedings, Arbitration rules, Europe, Expedited Arbitration, Institutions

The English court sets aside a Tribunal’s findings of lack of jurisdiction under a BIT

In a decision dated 2 March 2018 (the “Decision“), the English High Court has set aside parts of an award on jurisdiction (the “Award“) from a London-seated arbitration (the “Arbitration“) concerning claims brought by GPF GP S.a.r.l (“Griffin“) against Poland under the bilateral investment treaty between the Belgium-Luxembourg Economic Union and Poland (the “BIT“).

In so doing, the Court upheld Griffin’s application under section 67 of the 1996 English Arbitration Act (the “Act“), in which Griffin submitted that the Award issued by the tribunal (the “Tribunal“) on 15 February 2017 contained two separate errors as to substantive jurisdiction, namely:

     (i)          the Tribunal’s determination that it did not have jurisdiction over Griffin’s claims for breach of the Fair and Equitable Treatment (“FET“) standard in the BIT; and

    (ii)          the Tribunal’s determination, in respect of Griffin’s claims for indirect expropriation, that it had jurisdiction to consider only the effects of one specific allegedly expropriatory event, namely a decision of the Warsaw Court of Appeal, and not all the prior conduct of Poland.

All of Griffin’s claims should now proceed to the liability phase in the Arbitration. Poland has, however, expressly reserved the right to argue the compatibility of the BIT with EU law and any rights it may have in the context of the decision of the Court of Justice of the EU (“CJEU“) in the case of Achmea v Slovakia, which was issued just a few days after this judgment, on 6 March 2018.


Griffin’s claims in the Arbitration concern the alleged expropriation of its rights to a historic site in central Warsaw (the “Property“) which was to be developed commercially under a 2001 Perpetual Usufruct Agreement (the “PUA“).  When Griffin made its investment in 2008, demolition work had already begun under a decision and building permit issued by the City of Warsaw in 2005, but Griffin had applied for, and obtained, a recommendation from the monuments conservation official supporting a proposed expansion of the existing development project.

This official subsequently reversed her position.  Despite the formal challenges brought by Griffin, actions of the conservation official and the City of Warsaw ultimately culminated in the Warsaw Regional Court terminating the PUA for an alleged failure to develop the Property within the specified time limits.  This termination was confirmed by the Warsaw Court of Appeal on 19 December 2014.

In the Arbitration, Griffin has advanced claims: (i) for violation of the FET standard contained in Article 3.1 of the BIT; and (ii) for indirect expropriation in breach of Article 4.1 of the BIT.  In support of its indirect expropriation claim, Griffin seeks to rely on the combined effect of both the Warsaw Court of Appeal decision and all the prior conduct of Poland (the “Prior Measures“) that it claims led to the termination of the PUA.

In the Award, the Tribunal found, inter alia:

     (i)          that it did not have jurisdiction over Griffin’s claims for breach of the FET standard in the BIT; and

    (ii)          that, so far as Griffin’s claim for indirect expropriation was concerned, its jurisdiction was limited to considering whether the decision of the Warsaw Court of Appeal of 19 December 2014 had effects similar to expropriation, and that it did not have jurisdiction to consider any of the Prior Measures relied upon.

Griffin’s application under section 67 of the 1996 Arbitration Act

Because the arbitral seat is London, Griffin sought to challenge the Tribunal’s decision on jurisdiction in the English Court under section 67 of the Act, on the basis that the Tribunal had erred in both of its findings as to its lack of substantive jurisdiction.

The Court was satisfied from the authorities (including dicta of the Supreme Court in Dallah v Pakistan) that a section 67 application involves a re-hearing, and that it is for the Court to decide afresh whether jurisdiction does or does not exist, unfettered by the reasoning of the arbitrators or indeed the precise manner in which arguments were advanced before the arbitrators.  The Court also gave permission, to the extent this was necessary, for Griffin to advance arguments and adduce evidence that had not been put to the Tribunal.

The Decision

The Court, interpreting the arbitration agreement in the BIT in accordance with international law and the principles of interpretation set out in the 1969 Vienna Convention on the Law of Treaties (the “Vienna Convention“), found that the Tribunal had jurisdiction over all the factual matters, actions, allegations and/or measures relied upon by Griffin in its Statement of Claim in support of its expropriation and FET claims.

The scope of the Tribunal’s jurisdiction is defined by Article 9.1(b) of the BIT, which Griffin divided into a “first clause” and “second clause” as follows (using the originally agreed translation into English – there were some differences raised between the parties on certain aspects of the translation but the Court ultimately considered them immaterial):

“…disputes relating to expropriation, nationalization or any other similar measures affecting investments, and notably the transfer of an investment into public property, placing it under public supervision” (the “first clause“) “as well as any other deprivation or restriction of property rights by state measures that lead to consequences similar to expropriation” (the “second clause“).

The Court held that the Tribunal was wrong to conclude that any claim for creeping expropriation fell within the second clause, considering that it rightly fell within the first. On the Court’s interpretation, the second clause is concerned with measures “other” than expropriation (lesser wrongs) that lead to consequences similar to expropriation, as opposed to being in and of themselves expropriatory. It ruled accordingly that this provision granted jurisdiction to the Tribunal to consider Griffin’s FET claim.

The Court considered that its interpretation of Article 9.1(b) was consistent with the principles set out in the Vienna Convention, namely, that words are to be interpreted in good faith in accordance with their ordinary meaning in their context and in the light of the object and purpose of the BIT, and that all the words used should be given meaning and effect (“effet utile”).  It found that the Tribunal’s interpretation, on the other hand, failed to give meaning and effect to the second clause, and all the words therein.

Further, the Court found, contrary to the holding by the Tribunal, that a claim for creeping expropriation was not precluded where there was a specific event in the chain of events that might ultimately be found to be itself a form of direct or indirect expropriation (such as the Court of Appeal decision).  The Court considered that its position better reflected international law and was consistent with previous cases such as Siemens v Argentina, Crystallex v Venezuela and Teinver v Argentina.  The Court also found that the Tribunal had misapplied the so-called “pro tem” test, the purpose of which is to protect the integrity of the merits phtase whilst making preliminary jurisdictional determinations. The question for the Tribunal to determine was whether “assuming Griffin could establish its factual case was it capable of falling within the Tribunal’s jurisdiction“?  It was wrong to assume at the jurisdictional phase that any of the alleged acts would be established to be a form of direct or indirect expropriation at the merits phase “so as to foreclose consideration of all prior acts“.

Accordingly the Court upheld Griffin’s application, and set aside the relevant concluding paragraphs of the Award, replacing them with its own language confirming the Tribunal’s jurisdiction.


While rare, there are other examples of national courts considering the question of a tribunal’s jurisdiction in a treaty case.  However, the courts will usually either confirm the tribunal’s ruling of jurisdiction or overturn a finding of jurisdiction.  This case appears to be unique in overturning a finding of no jurisdiction and sending the claims back to the same Tribunal.  It will be interesting to see how this is dealt with by the Tribunal in the Arbitration.

It bears emphasis that such an outcome would not be possible in ICSID arbitration, where awards are not subject to the supervisory power of any national court, or indeed in non-ICSID arbitration in one of the many other jurisdictions where the courts do not have the power to set aside a tribunal’s finding that it lacks substantive jurisdiction.  This accordingly represents another factor to take into account when considering a choice of dispute resolution options under an investment treaty.

For more information, please contact Andrew Cannon, Partner, Naomi Lisney, Senior Associate, Vanessa Naish, Professional Support Consultant, or your usual Herbert Smith Freehills contact.

Andrew Cannon
Andrew Cannon
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+44 207 466 2852

Naomi Lisney
Naomi Lisney
Senior Associate
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+44 207 466 3417

Vanessa Naish
Vanessa Naish
Professional Support Consultant
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+44 207 466 2112



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Filed under Awards, Challenges to awards, Court intervention, Investment Arbitration, Jurisdiction, Public International Law, Uncategorized

India announces further amendments to the Arbitration Act to strengthen institutions and clarify previous reforms

According to this press release, on 7 March 2018, the Indian Cabinet approved a draft Bill to amend the Arbitration and Conciliation Act, 1996 (“Arbitration Act“). The press release indicates that the Bill will focus on building institutional support for arbitration by establishing a new body, the “Arbitration Council of India” (“Council“), to grade arbitral institutions, develop guidelines for the accreditation of arbitrators and promote the use of arbitration and ADR. It also suggests that the Bill will impose a duty of confidentiality on all aspects of an arbitration, except that the Council will maintain an electronic repository of all awards (with perhaps the implication that awards will also be published in some form). Finally, the press release notes that aspects of the 2015 Amendments will be clarified, including the controversial twelve month time-limit for tribunals to render awards and the somewhat ambiguous application of the 2015 Amendments to existing proceedings.

The proposed amendments derive from recommendations made by the Srikrishna Committee that was set up to review the Arbitration Act. We reviewed the report here.

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Filed under ADR, Arbitration laws, Asia, Confidentiality, India

Security for costs granted by English Court in investment treaty award challenge in which claimants are receiving third-party funding

In its recent judgment in Progas Energy Limited and ors v Pakistan [2018], the English High Court (the Court) granted Pakistan’s request for security for their costs in defending a challenge to an investment treaty award. The Court declined Pakistan’s application for security for its unpaid costs in the arbitration awarded to them by the tribunal. The case is of particular interest because the Court considered the relevance to the applications of the fact that the Claimants were funded by a third-party funder.

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Filed under Asia, Challenges to awards, Costs, Europe, Investment Arbitration, Third Party Funding

Justin D’Agostino to lead ICC Court’s new Belt and Road Commission

Justin D’Agostino, Herbert Smith Freehills’ Global Head of Disputes, has been appointed chair of a new ICC Court commission to develop the ICC’s approach to dispute resolution procedures for China’s Belt and Road initiative.

“There is no ‘one-size-fits-all’ method of resolving Belt and Road disputes. But there is a concerted effort to encourage mediation clauses in Belt and Road agreements, with provision for arbitration if mediation fails,” said D’Agostino, who is also Hong Kong’s alternate member of the ICC Court.

“ICC is already a world leading provider of arbitration and mediation services, with tried and tested mechanisms and a strong pool of arbitrators and mediators. It is ideally placed to provide appropriate, effective dispute resolution services to parties all along the New Silk Road”.

The massive scale of Belt and Road is generating huge numbers of infrastructure projects across Asia and beyond – and every new project also has the potential for complex disputes.

Herbert Smith Freehills is engaged in a significant quantity of work generated by the US$900 billion Belt and Road initiative, advising on deals and projects worth over US$10 billion. Last week, the firm welcomed three new partners to our Greater China practice. Hew Kian Heong, Ellen Zhang and Michelle Li will further strengthen our existing team advising clients on Belt and Road projects.

“As China’s new business champions go global, we are increasingly well-placed to advise them on expansion around the globe, including any international disputes that may arise – both along the Belt and Road and other investment corridors,” said D’Agostino.

Click here for more on resolving disputes that arise out of Belt and Road transactions. This article originally appeared in the 5th edition of our quarterly publication, Inside Arbitration.

Justin D'Agostino
Justin D'Agostino
Global Head of Practice - Disputes
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+852 2101 4010

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State-to-State dispute settlement under the EU’s draft Withdrawal Agreement: CJEU jurisdiction not arbitration

We have known for some time now that the UK and EU have very different views regarding the state-to-state dispute resolution mechanism to be contained in the Withdrawal Agreement between the EU and the UK. The EU has never made any secret of its intention for the CJEU to adjudicate on disputes between the UK and the EU over the interpretation of, and compliance with, the Withdrawal Agreement. Yesterday the EU released a draft Withdrawal Agreement for the UK’s consideration which contains a state-to-state dispute resolution provision which is consistent with that approach. This post provides an initial reaction to this draft provision.

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Filed under Brexit, EU, Europe, Public International Law

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 Indian court decisions, including the availability of interim relief in support of foreign arbitration, sanctions for non-compliance with arbitral orders and the pro-arbitration position adopted by the courts in upholding a foreign seat. In other news, we consider the rise of institutional arbitration in India and a detailed analysis of the Sri Krishna Committee report, developments in the Indian mediation landscape, proposed reforms for commercial courts, as well as India-related bilateral investment treaty news (and other developments). Continue reading

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Filed under Asia, Court intervention, India, Institutions, Interim relief, News


In A and Others v Housing Authority (HCCT 54/2017), the Hong Kong Court of First Instance (Court) reiterated the high threshold for leave to appeal an arbitral award on a question of law.  In dismissing the Plaintiffs’ application, the Court confirmed that leave would only be granted if it can be demonstrated to the Court, clearly, quickly and easily, without meticulous legal argument that the decision is “obviously, or demonstrably, wrong“, or that the correctness of the decision is “seriously in doubt“.

Under current legislation, parties to arbitrations seated in Hong Kong do not, in general, have an automatic right to appeal an arbitral award on a question of law. Such right, along with other special rights of recourse to the courts set out in Schedule 2 to the Arbitration Ordinance (Cap. 609) (Ordinance), is a key feature of the old “domestic regime” and, since 1 June 2017, parties wishing to enjoy such rights must expressly “opt in” to these provisions pursuant to Section 99 of the Ordinance.  That said, the provisions in Schedule 2 will continue to apply to arbitration agreements providing for “domestic arbitration” that were entered into before 1 June 2017 (see our earlier blog post for detail). Accordingly, this case remains an important decision. Continue reading

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