Award dismissing a claim for inordinate and inexcusable delay survives challenge in the English court

In Grindrod Shipping Pte Ltd v Hyundai Merchant Marine Co. Ltd, the English High Court (“the Court“) rejected an application under s68 of the Arbitration Act 1996 (“the Act“) to challenge an Award (the “Award“). Six years after the proceedings had commenced, the tribunal (“Tribunal“) issued a final award dismissing the claim under s41(3) of the Act on the ground of inordinate and inexcusable delay. Grindod Shipping challenged the award under s68 of the Act, ¬†arguing that the Tribunal’s decision was based on grounds not advanced by the respondent. The Court concluded that the issues had been sufficiently “in play” for all sides to have had a fair opportunity to respond. There was no breach of the tribunal’s duty to act fairly and impartially and therefore no procedural irregularity.

Continue reading

“We will pay for delays” – ICC clampdown on its award scrutiny process

On 13 July 2016, the International Chamber of Commerce ("ICC") issued its revised Practice Note allowing for a reduction in ICC administrative fees of up to 20% for unjustified delays in the ICC's award scrutiny process. The revised Practice Note also sets out the exact steps the scrutiny process entails. Reflecting on the amendments, ICC Court President Alexis Mourre noted that "as a world leader in commercial dispute resolution, it is imperative for ICC to lead by example and take steps to improve transparency and accountability wherever appropriate".

An overview of both the scrutiny process and the changes are provided below.

Continue reading

ICC Court announces new policies to foster transparency and ensure greater efficiency

On 5 January 2016, the ICC Court announced two new policies aimed at enhancing the efficiency and transparency of ICC arbitration proceedings.   The first aims to promote transparency for users and stakeholders in ICC arbitration by publishing the names and certain details of arbitrators sitting in ICC cases.  The second aims to encourage the prompt submission of awards by arbitrators to the ICC Court for scrutiny, by tying the arbitrators' remuneration to the time taken to submit the award.

Continue reading

Delay causes English Court to deny anti-suit injunction in respect of foreign proceedings brought in breach of an arbitration agreement

A recent case in the English High Court (the Court) demonstrates the need to act promptly when seeking an anti-suit injunction in relation to proceedings in a foreign court. The claimant, Essar Shipping Ltd (ESL) sought an anti-suit injunction in respect of proceedings brought by the respondent, Bank of China Ltd (the Bank) in the Qingdao court in China (the Qingdao Proceedings) on the basis that the subject matter of the dispute was subject to a London-seated arbitration agreement.  ESL also sought a declaration that the arbitration agreement was valid and damages for breach of the arbitration agreement. 

The Court granted the declaration sought on the basis that, on the Bank’s case, the dispute was subject to the arbitration agreement. ESL was also allowed to proceed with its claim for damages.  However, the Court refused to grant the anti-suit injunction.  ESL had objected to the jurisdiction of the court in the Qingdao Proceedings but had not brought the application for an anti-suit injunction promptly. 

Parties intending to seek interim relief should take note of the Court’s emphasis on the requirement of promptness. This is the key factor, not whether it is reasonable to apply to the foreign court first to object to jurisdiction, or whether there will be a long delay in the foreign court.

Notably, whilst the point was not relevant in this case, the Court suggested that anti-suit injunctions cannot be granted in respect of proceedings in another EU Member State Court under the Recast Brussels Regulation.

Continue reading

English Court of Appeal permits enforcement of a New York Convention award on the basis of excessive delay in challenge proceedings in the courts of the seat

In its judgment in IPCO (Nigeria) Limited v Nigerian National Petroleum Corporation (No.3) [2015] EWCA Civ 1144 & 1145, handed down on 10 November 2015, the Court of Appeal considered whether the Appellant ("IPCO") was entitled to enforce an arbitration award made against the Respondent ("NNPC") in Nigeria in October 2004 (the "Award").

In this significant decision, the Court of Appeal ordered that IPCO should be able, in principle, to enforce the Award, notwithstanding the existence of challenges to it in Nigeria, given the very significant delay in resolving those challenges before the Nigerian courts. On the facts of this case, the Court of Appeal considered that the alternative result (of yet further adjournment) would, in commercial terms, be absurd and inconsistent with the principles underpinning the New York Convention.

Continue reading

English High Court dismisses section 68 challenge to arbitral award on basis of delay

In its recent judgment in B.V. Scheepswerf Damen Gorinchem v The Marine Institute [2015] EWHC 1810 (Comm) (available here), the English High Court (the Court) dismissed the claimant’s challenge to an arbitral award under s68 of the Arbitration Act 1996 (the Act) on the basis of delay in issuing the award. The award related to a dispute between B.V. Scheepswerf Damen Gorinchem (Damen) and The Marine Institute (TMI) about a vessel that Damen agreed to build and TMI agreed to purchase. TMI alleged that Damen’s errors in commissioning the engines had caused damage to the vessel which necessitated repairs.

The dispute was submitted to arbitration in London before a sole arbitrator under the LMAA Terms. The hearing lasted for 3 days in September 2013, but the award (which was in TMI’s favour) was not issued until September 2014. The arbitrator provided no “proper” justification for this lengthy delay.

Damen brought an application to set aside the award under section 68 of the Act, which allows the court to set aside awards on the basis of a serious irregularity affecting the tribunal, the proceedings or the award. The grounds of the application were that:

  • the lengthy delay in issuing the award amounted to a breach of the arbitrator’s general duties and the procedure agreed between the parties (the LMAA terms); and
  • the arbitrator had failed to deal with all the issues put before him.

The Court rejected the challenge that the lengthy delay, of itself, was not a sufficient ground to justify the setting aside of an award. The most that could be said was that the delay might lead the court to subject the award to greater scrutiny when considering whether it addressed all the issues put to the tribunal. In this case, however, the arbitrator had addressed all the issues.

The judgment is significant for a number of reasons. It shows that a lengthy delay, without more, will not generally support a challenge under s 68 of the Act. However, notwithstanding the outcome in this case, it also demonstrates that a substantial delay in issuing an award could nonetheless lead to additional scrutiny by the court. Further, the Court confirmed that it will not permit challenges to an arbitrator’s factual or legal findings to be “dressed up” as challenges under s68.

Continue reading