ENGLISH COURT OF APPEAL DECIDES QUESTION OF LAW ARISING FROM APPLICATION TO DETERMINE PRELIMINARY POINT OF LAW UNDER S45 ARBITRATION ACT 1996

The English Court of Appeal (the Court) has recently decided a key question of shipping law in The Eternal Bliss [2021] EWCA Civ 1712, following an appeal from the decision of the High Court. The question arose last year before the High Court following the parties to an arbitration bringing an application under s45 Arbitration Act 1996 (the 1996 Act) for the determination of two preliminary points of law. Departing from the High Court’s decision, the Court of Appeal found that, absent any indication in the charterparty to the contrary, demurrage is liquidated damages for all losses arising from the charterer’s failure to load or unload cargo within laytime.

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ENGLISH HIGH COURT MAINTAINS ANTI-SUIT INJUNCTIONS FOR INSURERS AND CONSIDERS CONFLICTING DISPUTE RESOLUTION CLAUSES

In the recent case of AIG Europe SA and others v John Wood Group Plc and another [2021] EWHC 2567 (Comm), the High Court (the Court) maintained certain anti-suit injunctions granted in favour of a number of insurers who subscribed to various excess liability policies, two of which contained a valid arbitration clause. The Court refused, however, to maintain relief in respect of other insurers subscribed to one of the excess policies.

In doing so, the Court provided guidance on the approach taken by English courts to conflicting standard term and negotiated dispute resolution clauses, and in particular when it will construe jurisdiction clauses in favour of the English courts as exclusive.

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HSF ANALYSIS OF SUPREME COURT DECISION IN KABAB-JI SAL (LEBANON) V KOUT FOOD GROUP (KUWAIT)

On 27 October the Supreme Court handed down its much anticipated decision in Kabab-Ji SAL (Lebanon) v Kout Food Group (Kuwait) [2021] UKSC 48 (see our blog post on the Supreme Court decision here for background to the decision). London-based Partner Craig Tevendale and Professional Support Lawyer Liz Kantor have authored a case analysis piece for LexisPSL on this decision, which is reproduced below.

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UK SUPREME COURT UNANIMOUSLY DISMISSES APPEAL IN KABAB-JI SAL (LEBANON) V KOUT FOOD GROUP (KUWAIT)

The UK Supreme Court (the Court) has handed down its much-anticipated decision in Kabab-Ji SAL (Lebanon) v Kout Food Group (Kuwait) [2021] UKSC 48, unanimously dismissing Kabab-Ji SAL (Lebanon) (KJS)’s appeal. The decision to dismiss the appeal means that KJS cannot enforce a Paris-seated award granted in its favour by an arbitral tribunal against Kout Food Group Kuwait (KFG) in England and Wales.

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HERBERT SMITH FREEHILLS SIGNS THE GREEN PLEDGE OF THE CAMPAIGN FOR GREENER ARBITRATION

Herbert Smith Freehills has signed the Green Pledge of the Campaign for Greener Arbitrations (the CGA), after acting as an institutional supporter of the CGA for the past year.

The CGA is a global initiative aimed at reducing the carbon footprint of arbitral proceedings. Signatories of the Green Pledge make a commitment in their personal capacity to minimise the environmental impact of the arbitrations in which they are involved. The focus of the Green Pledge is, in particular, on the reduction of the environmental impact associated with travel and the use of paper. Other commitments set out in the Green Pledge include corresponding electronically, unless hard copy correspondence is expressly needed, encouraging the use of videoconferencing facilities as an alternative to travel, and avoiding printing.

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ENGLISH COURT CONFIRMS THAT A THIRD PARTY CANNOT RELY ON FINDINGS IN AN ARBITRAL AWARD BETWEEN DIFFERENT PARTIES

In the recent case of Vale v Steinmetz [2021] EWCA Civ 1087, the English Court of Appeal confirmed that, except in rare circumstances, the findings in an arbitral award will not be binding on, and cannot be relied upon in separate proceedings between, different (but related) parties.

The decision is a welcome affirmation of the limited binding scope of the findings in an arbitral award, particularly for parties involved in complex disputes involving separate litigation and arbitration proceedings against different but related parties.

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ENGLISH COURT UPHOLDS MULTIPLE CHALLENGES TO ARBITRAL AWARD FOR BREACH OF THE TRIBUNAL’S DUTY OF FAIRNESS

In PBO v DONPRO and others [2021] EWHC 1951 (Comm), the English High Court (the Court) allowed a number of challenges brought by PBO under s68 of the Arbitration Act 1996 (the Act) against an arbitral award rendered by the Federation of Cocoa Commerce (FCC) Board of Appeal (the Board). As such, this is an unusual example of a successful s68 challenge, made all the more unusual by the number of irregularities raised by the applicant, all of which were upheld by the Court.

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ENGLISH HIGH COURT CONSIDERS SCOPE OF ARBITRATION AGREEMENT WHEN DETERMINING JURISDICTION TO GRANT INTERIM RELIEF IN SUPPORT OF ARBITRATION

In AT and others v Oil and Gas Authority [2021] EWHC 1470 (Comm), the High Court (the Court) considered an application by four claimants under s.44(3) of the Arbitration Act 1996 (the Act) for an order restraining the defendant from circulating a redacted version of a notice (the Notice) to third parties. The Court found that the underlying dispute was not within the scope of the arbitration agreement between the parties and, accordingly, that it lacked jurisdiction to grant such an interim injunction under s.44(3) of the Act. However, having determined that the claimants should pursue any claim through judicial review rather than arbitration, the Court did grant the injunction, concluding that the application was one “for interim relief in a judicial review claim“.

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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.

ENGLISH COURT DENIES AN APPLICATION FOR A FURTHER EXTENSION OF TIME TO CHALLENGE AN AWARD UNDER THE ARBITRATION ACT 1996

In STA v OFY [2021] EWHC 1574 (Comm), the English High Court refused to grant an extension of time to an applicant seeking to challenge an arbitral award under s68 of the Arbitration Act 1996 (the “Act“), in circumstances where the applicant had let lapse a prior extension order.

The Court’s analysis in this case provides a useful insight into the high bar that s68 applicants face when failure to abide by deadlines is perceived to risk undermining the purpose of the Act.

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