English Commercial Court orders stay of Lebanon-seated arbitration in ‘exceptional’ case

In the most recent decision in the Sabbagh family feud, Sabbagh v Khoury & Ors [2018] EWHC 1330 (Comm), the English Commercial Court ordered the stay of parallel Lebanon-seated arbitration proceedings. This was despite the tribunal in that case having found that it had jurisdiction to hear it. In granting the interim injunction to restrain the pursuit of the arbitration proceedings, Mr Justice Knowles was quick to acknowledge the significance of a court that is not the supervisory court granting an injunction to prevent parties prosecuting a foreign 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 review a number of recent arbitration-related decisions of the Indian courts, in particular a Supreme Court ruling on applicability of BALCO to an agreement varied after 6 September 2012 and a decision by the Delhi High Court issuing anti-arbitration injuction against London arbitration. We also provide an update on prospective changes to India’s investment arbitration and domestic dispute resolution landscapes.

For further information, please contact Nicholas Peacock, Head of India Arbitration Practice, Alastair Henderson, Managing Partner-SE Asia, Donny Surtani, Senior Associate, or your usual Herbert Smith Freehills contact.

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Delhi High Court issues anti-arbitration injunction against London arbitration

In a striking decision which bucks the trend of pro-arbitration decisions from the Indian judiciary in recent years, a single judge of the Delhi High Court has restrained McDonald’s from invoking an LCIA arbitration clause in its joint venture agreement with its local partner. The court’s order was issued on the basis that the arbitration agreement was inoperative or incapable of being performed, and on the basis that in an arbitration involving predominantly Indian parties and Indian law, London was a forum non conveniens and therefore the arbitration proceedings were “vexatious” and “oppressive“.

The decision may be subject to appeal, but in the meantime will raise concerns for any parties facing opposition in India to attempts to invoke offshore arbitration in Indian law agreements.

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