English Commercial Court dismisses s68 challenge but observes that the arbitrators exceeded their powers in granting interim relief in the form of an award

On 16 September 2022, the English Commercial Court delivered its judgment in EGF v HVF, HWG, TOM, DCK, HRY [2022] EWHC 2470 (Comm) in respect of a London-seated arbitration under UNCITRAL Rules, dismissing a challenge to a partial award. The challenge was made partly under section 68 of the English Arbitration Act 1996 (the “Act“).  Mr Justice Baker dismissed the challenge on the basis that substantive injustice had not been proven. However, he commented (obiter), that in his view, the arbitrators had exceeded their powers in making an interim payment order in the form of an award.

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Upcoming Webinar: Attitudes to Compulsory Mediation in Arbitration and Litigation

On Wednesday 19 October 2022 at 12:30 pm (GMT) speakers from Herbert Smith Freehills will join the panel for a live London Chamber of Arbitration and Mediation (LCAM) webinar on compulsory mediation in arbitration and litigation.

The recent LCAM-HSF survey on attitudes to compulsory mediation sought respondents’ views on whether a form of compulsory mediation should be introduced into the litigation and/or arbitration process and, if so, in what form. The webinar will look at these topics and other insights from the survey. Continue reading

ENGLISH COURT PERMITTED BUT NOT REQUIRED TO REFUSE ENFORCEMENT WHERE STATUTORY GROUNDS MADE OUT

Kei (a protected party by his litigation friend) v Hua She Asset Management (Shanghai) Company Ltd [2022] EWHC 662 (Comm), before Miss Julia Dias QC (sitting as a Deputy High Court Judge in the Commercial Court).

The English High Court restated the principles applicable to a section 103 application under the Arbitration Act 1996 (the “Act“) to resist enforcement of a foreign award. In particular, the court highlighted its discretion not to set aside an order for enforcement, even where one of the s103(2) conditions is met under the Act (albeit that those conditions were not met in this case).

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English Commercial Court grants a final anti-suit injunction despite 13 month delay

In Africa Finance Corp and others v Aiteo Eastern E&P Company Ltd [2022] EWHC 768 (Comm), the English Commercial Court ruled that a 13 month delay in seeking an anti-suit injunction was not unreasonable given that the parties were engaged in negotiations during that period and the foreign proceedings in Nigeria had not advanced to a significant extent (in part due to the coronavirus pandemic). Although parties should continue to seek anti-suit injunctions as promptly as possible, this decision shows that courts are willing to show a degree of flexibility in determining whether delays are reasonable and therefore whether an anti-suit injunction should be granted.

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ENGLISH COURT CONSIDERS STEPS IN LEGAL PROCEEDINGS WHICH PREVENT A SUCCESSFUL STAY APPLICATION

In Fairpark Estates Ltd and others v Heals Property Developments Ltd [2022] EWHC 496 (Ch), the English High Court upheld an order dismissing the appellants’ application for a stay of legal proceedings. The Court found that the appellants had taken steps in the proceedings to answer the substantive claims, so could not apply for a stay under s.9(3) of the Arbitration Act 1996 (Act).

HHJ Richard Williams held that the appellants took a step in the proceedings to answer the respondent’s claims by:

  1. providing final undertakings in a Consent Order which effectively disposed of an application for injunctive relief; and
  2. requesting and obtaining a further extension of time to respond to the monetary claims, and failing to reserve their rights to apply for a stay when doing so.

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DETERRING AND SANCTIONING “SPECULATIVE” CHALLENGES TO ARBITRAL AWARDS IN THE ENGLISH COURT: REVISIONS TO THE COMMERCIAL COURT GUIDE

In 2013 the English Court introduced provisions into section O of the Commercial Court Guide designed to deter parties from mounting “speculative” challenges of arbitral awards on the grounds of serious irregularity under s68 of the Arbitration Act 1996 (the Act) (see our blog post here). Small additional changes were also made in 2017.

Yesterday a new, updated version of the Commercial Court Guide was released. Further revisions have been made to Section O to deter unmeritorious challenges to arbitral awards and confirm the court’s powers to act to dismiss such claims and sanction parties who bring them. Importantly, unlike the earlier revisions to Section O, many of the amendments relate to challenges for lack of jurisdiction under s67 of the Act.

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ENGLISH COURT OF APPEAL CONSIDERS CONFIDENTIALITY IN THE CONTEXT OF ARBITRATION-RELATED COURT PROCEEDINGS

In the case of CDE v NOP [2021] EWCA Civ 1908, the English Court of Appeal was asked to determine whether, in court proceedings which overlapped with the subject matter of an LCIA arbitration, a case management conference should have been held in public or private, and whether an upcoming summary judgment application should also be held in public or private. In dismissing (in large part) the appeal and holding that the first instance judge was correct to have held the case management conference in private, the Court of Appeal addressed the distinction between “arbitration claims” under CPR 62.10 and court proceedings under CPR 39.2, finding that the starting point for the latter, even where the subject matter overlaps with an arbitration, is always that they will be held in public unless one of the applicable exceptions applies.

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ENGLISH COURT DETERMINES THAT AN APPLICATION TO STAY LEGAL PROCEEDINGS IN FAVOUR OF ARBITRATION SHOULD BE HEARD BEFORE A SUMMARY JUDGMENT APPLICATION

In the recent case of Deposit Guarantee Fund for Individuals v Bank Frick & Co AG [2021] EWHC 3226 (Ch), the English High Court has held that a defendant’s application to stay court proceedings in favour of arbitration pursuant to s9 of the Arbitration Act 1996 (Act) should be heard before its alternative summary judgment application.

The Court also held that the defendant had not, in seeking for the summary judgment application to be heard prior to the stay application, taken a “step in the proceedings to answer the substantive claim”, within the meaning of s9(3) of the Act, such that its conduct did not constitute a submission by the defendant to the court’s jurisdiction so as to deprive it of the right to apply for a stay under the Act.

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INSIDE ARBITRATION ISSUE #12: PERSPECTIVES ON CROSS-BORDER DISPUTES

Welcome to the twelfth issue of Inside Arbitration

We are delighted to share with you the latest, new look issue of this publication from Herbert Smith Freehills’ Global Arbitration Practice.

Uncertainty has been the watchword of 2021 so far. As the Covid-19 pandemic continues to impact our work and personal lives many questions remain about the virus and our global response to it. However, since the light at the end of the tunnel does appear to be shining more brightly, we have grasped the opportunity to look forward positively in this edition of Inside Arbitration.

Incorporating videos and soundbites from our practitioners around the network, in this edition:

  • Paula Hodges QC, Andrew Cannon, Simon Chapman QC and Vanessa Naish explore whether it is possible to predict how the post-pandemic disputes landscape may look and how arbitration practice may be impacted longer term.
  • The pandemic is not the only significant force for change and development facing the world at present. Antony Crockett, Patricia Nacimiento and Dr. Alessandro Covi look at what “ESG” means for businesses, how ESG issues are being introduced into commercial contracts, and the potential impact of these trends on international arbitration.
  • Continuing the theme of change, Craig Tevendale, Chris Parker and Charlie Morgan focus on energy transition, looking at the challenges on the horizon and the potential legal disputes that may arise from the proliferation of new infrastructure projects.
  • Change has also been felt within the Herbert Smith Freehills’ arbitration practice. Our three new talented arbitration Partners Dana Kim (in Seoul), Antony Crockett (in Hong Kong) and Ivan Teselkin (in Moscow) feature in Spotlight articles introducing their differing areas of practice and sharing their views on the outlook for arbitration in their regions.
  • The recognition of the talent of our practitioners and the growth of our global practice is exciting, but so too are successes in our cases, particularly those that can be reported publicly! Simon Chapman QC and Charlotte Benton discuss a recent success in a landmark case in Hong Kong, which has confirmed that failure to comply with escalation requirements will not affect an arbitration tribunal’s jurisdiction over the dispute.
  • Looking at wider developments across the globe, Andrew Cannon and Nihal Joseph explore the significance of an important new judgment from the Supreme Court of India which decided that two Indian parties may validly agree to resolve their disputes in arbitration seated outside India.
  • Chad Catterwell and Guillermo Garcia-Perrote look at the rise of Arbitration in Australia, and how the release of the ACICA Arbitration Rules 2021 have further strengthened ACICA’s status as the pre-eminent arbitral institution in Australia.
  • In our sector-focused piece Hew Kian Heong, James Doe and Noe Minamikata take a look at the current hot topics in construction arbitration: the impact of recent materials shortages, a possible rise in construction insolvencies and the continuing effects of the Covid-19 pandemic on construction projects.
  • Our “watch this space” feature covers the latest issues and developments in international arbitration.

Previous issues can also be viewed on our website.

We hope that you enjoy reading issue #12 of Inside Arbitration and would welcome any feedback you may have.