ENGLISH COURT DISMISSES S68 CHALLENGE TO PROCEDURAL ORDER

In K v S [2019] EWHC 2386 (Comm), the English Court (the Court) dismissed a challenge to a London Court of International Arbitration (LCIA) arbitral tribunal’s procedural order. The challenge was made on the grounds of serious irregularity under s68 of the Arbitration Act 1996 (the Act) but was dismissed for failing to satisfy any of the s68 requirements and for challenging a procedural order rather than an award. The judgment provides a clear indication of the parameters within which a s68 challenge may be brought.

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PRO-ENFORCEMENT STANCE OF ENGLISH COURTS IS PUT TO TEST IN S103(5) APPLICATION FOR ADJOURNMENT OF ENFORCEMENT

In the recent case of AIC Limited v. The Federal Airports Authority of Nigeria, the English High Court revisited the difficult question of whether to exercise its discretion under s103(5) of the Arbitration Act 1996 (the “1996 Act“) to stay enforcement proceedings in England in favour of pending set aside proceedings in a foreign court, and to order the party resisting enforcement to provide security for the award. Continue reading

English High Court sets aside award for failure to properly cross-examine a witness on a core issue and basing its decision on matters not properly argued by the parties

In P v D [2019] EWHC 1277 (Comm), the English High Court set aside an arbitral award on the basis that the tribunal had reached a finding of fact on a core issue that had not properly been put to a witness in cross-examination and that the tribunal had based its decision on a case not properly argued by the parties. Under s68 of the Arbitration Act 1996 (the “Act”), the court has the power to set aside an award on grounds of serious irregularity. It is rare for the court to exercise this power – although that does not deter aggrieved parties from submitting applications to set aside. The judgment gives important guidance on the court’s approach on this important procedural issue, and addresses considerations of fairness to witnesses in cross-examination, and to the parties putting those witnesses forward.

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ENGLISH COURT GRANTS ANTI-SUIT INJUNCTION ORDERING THE DEFENDANT TO DISCONTINUE ITS CLAIM IN A NEW YORK COURT UNDER A D&O INSURANCE POLICY

In a recent case, the English High Court (the Court) granted XL Insurance Company (XL) a final anti-suit injunction restraining Peter Little (PL) from pursuing litigation proceedings against XL in the District Court of the Southern District of New York (the New York proceedings), on the basis that PL was bound by the arbitration agreement mandating London-seated arbitration in the directors’ and officers’ (D&O) insurance policy (the Policy) issued by XL to PL’s former employer, Barclays PLC (Barclays).

While this decision does not advance the law in this area, it highlights a key advantage of choosing London as the arbitral seat, particularly in sectors where claims are likely to be brought by parties who had not themselves entered into the arbitration agreement. Continue reading

ENGLISH COURT FINDS ONE ERROR OF LAW BUT DECLINES TO OVERTURN AWARD UNDER S69 ARBITRATION ACT 1996

The English High Court (the Court) in Eleni Shipping Limited v Transgrain Shipping B.V. [2019] EWHC 910 (Comm) has reviewed an arbitral award, following an appeal on a point of law brought under s69 Arbitration Act 1996 (s69 AA 1996), and determined that the tribunal made an error of law. While the Court ultimately refused to overturn the award, as it upheld the tribunal’s interpretation of the second point of law in question, this case is nevertheless significant as a rare example of the Court ruling that the tribunal had erred under s69.

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FIVE AT HERBERT SMITH FREEHILLS RANKED IN INAUGURAL TOP 200 UK INTERNATIONAL ARBITRATION POWERLIST

Herbert Smith Freehills’ London-based international arbitration partners Paula Hodges QC, Craig Tevendale, Nicholas Peacock, Andrew Cannon and Chris Parker have all been named amongst 200 leading lawyers in Legal 500’s inaugural UK International Arbitration Powerlist.

The list, which is based on extensive research by Legal 500, highlights the UK’s leading arbitration practitioners working in law firms and at the Bar. The research is based upon submissions, client referees, interviews and feedback to refine the top arbitrators globally.

The firm’s international arbitration team in the UK has been described by Legal 500 as a ‘strong team of dedicated lawyers who master complex subject matters… the advice is pragmatic, measured and fit for purpose’.

UK Head of Arbitration Craig Tevendale commented: “We are all thrilled to feature in the inaugural “Powerlist” amongst esteemed colleagues from within the UK arbitration community, a great many of whom we recently hosted at our London Arbitration Community Dinner. It is fantastic to have all five partners recognised in this way”.

English High Court orders indemnity costs in discontinued s.68 proceedings to challenge awards

In Koshigi Ltd and another company v Donna Union Foundation and another [2019] EWHC 122 (Comm) the English High Court considered an application for costs arising from discontinued proceedings under s.68 Arbitration Act 1996 to challenge two arbitral awards. The claimant in the underlying arbitration had successfully obtained two awards in its favour from the tribunal, which the respondents then sought to challenge in the English courts through two related sets of proceedings for serious irregularity under s.68, alleging bias on the part of the chairman of the tribunal. The respondents then discontinued the s.68 proceedings before they reached a hearing, asserting that the awards which they were seeking to challenge had become unenforceable.

In considering the claimant’s application for costs in relation to the discontinued proceedings, the Court decided that the liability for the costs rested with the applicants (the respondents in the arbitration) and that the costs should be assessed on an indemnity basis rather than the usual – and typically lower  – standard basis. The Court’s approach, which disincentivizes the pursuit of s.68 applications without a strong substantive basis, is consistent with other attempts by the English courts to block applicants who bring weak s.68 appeals.

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Prague Rules on efficiency in arbitration now launched

The new Rules on the Efficient Conduct of Proceedings in International Arbitration (Prague Rules) launched last month in the Czech Republic and aim to provide a more efficient framework for arbitral procedure which can be used to streamline a dispute, reducing delay and costs. Their approach is closer to civil law than common law traditions, with the tribunal pro-actively managing the dispute from the start.

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ICC STRIVES FOR GREATER TRANSPARENCY AND EFFICIENCY IN UPDATED PRACTICE NOTE TO PARTIES AND ARBITRAL TRIBUNALS ON THE CONDUCT OF ARBITRATION UNDER THE ICC RULES

On 20 December 2018, the International Court of Arbitration of the International Chamber of Commerce (ICC) published updated guidance on the conduct of arbitration under its arbitration rules. The Note to Parties and Arbitral Tribunals on the Conduct of Arbitration under the ICC Rules of Arbitration (Note) entered into force on 1 January 2019, and represents a continuation of the ICC’s efforts to increase transparency and efficiency, and widen its range of services to users.  We consider six of the most significant updates to the Note below.

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English court provides new guidance on summary dismissal process for groundless serious irregularity challenges

The English High Court has in the last few days proposed a procedurally strict approach to serious irregularity challenges under s68 of the Arbitration Act 1996 where these have already been dismissed on paper. The decision in Midnight Marine Ltd v Thomas Miller Speciality Underwriting Agency Ltd [2018] EWHC 3431 (Comm) suggests that the court should take a more active role in preventing such hearings from escalating into a full s68 challenge hearing (case available here).

The High Court’s earlier decision in the case of Asset Management Corporation of Nigeria v Qatar National Bank [2018] EWHC 2218 (Comm) covered in our previous blog post, demonstrated the difficulty in disposing of bad s68 challenges quickly. This judgment emphasised that an oral hearing will usually be granted after a challenge is thrown out on paper, unless the case is “something akin to vexatious“. In this case, the summary dismissal of the s68 challenge was nevertheless followed by two further applications, and an oral hearing, before the challenge was finally thrown out.

Both of these recent cases promote the summary dismissal process in paragraph O8.5 of the Commercial Court Guide as a useful tool for weeding out unmeritorious s68 challenges, but the decisions differ on how to treat applications to set aside orders dismissing such challenges. The decision in Midnight Marine v Thomas Miller takes a tougher line than the earlier Asset Management Corporation of Nigeria v Qatar National Bank decision, suggesting that the oral hearing referred to in the summary dismissal process should be a very short hearing, directed only at the question of whether the application has a real prospect of success.

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