English court endorses typical use of tribunal secretary in LCIA arbitration

The English Court has rejected an arbitrator challenge under s24 of the English Arbitration Act 1996 (the Act) on the basis of alleged "over-delegation" of their duties to their secretary. The Court's decision was based on a review of the Act, the LCIA Rules 1998, the various guidelines on the use of Tribunal Secretaries, academic commentary and previous English case law. In addition, the Court noted that it should be slow to depart from the conclusions of the LCIA Court on the same grounds of challenge.

This is a valuable judicial discussion of the practical use of tribunal secretaries and demonstrates that the Court will give robust consideration to whether the grounds of s24 are made out with regard to the use of a secretary.  

See P v Q 2017 EWHC 194 (Comm).

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English Court identifies “weaknesses” in the 2014 IBA Guidelines on Conflicts of Interest when considering challenge of an Award for apparent bias

In the case of W Limited v M SDN BHD [2016] EWHC 422 (Comm) the Claimant, W Limited, sought to challenge two awards in the English Court for serious irregularity under s68(2) of the Arbitration Act 1996. The challenge was founded on apparent bias of the arbitrator based on an alleged conflict of interest. No actual bias was alleged.

The case has wider importance for the international arbitration community because the Claimant referenced the 2014 IBA Guidelines on Conflicts of Interest in International Arbitration (IBA Guidelines) to substantiate its position, in particular, paragraph 1.4 of the Non-Waivable Red List.

Having applied the English law test for apparent bias and considered the IBA Guidelines, the English Court identified a number of "weaknesses" in the IBA Guidelines. This included the inability of parties or arbitrators to apply "case-specific judgment" to a Non-Waivable Red List situation. The court also commented that the conflict situation identified in this case was, in many respects, less serious than some of those identified in the Waivable Red List. Despite the conflict situation falling squarely within paragraph 1.4 of the Non-Waivable Red List, the court concluded that there was no apparent bias and dismissed the challenge.

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Video post: State immunity and waiver of immunity issues in English law

Andrew Cannon, Partner in our International Arbitration and Public International Law practices has posted a short video on our Public International Law Notes blog on “State immunity and waiver of immunity issues in English law”.  Andrew discusses the restrictive doctrine of immunity enshrined in the English State Immunity Act 1978 and describes the steps a party should take in dealing with a state to ensure an effective of waiver in respect of jurisdiction and enforcement.  To view the video, please click here.

Subscribers to our Arbitration Notes blog may also wish to subscribe to our Public International Law Notes blog for regular updates, analysis and comment on state immunity, investment treaty cases, investment protection, free trade agreements and other public international law issues. To subscribe to the Public International Law Blog, please click here, and enter your email in the “subscribe” box.

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English Court finds no jurisdiction to grant freezing orders against non-party foreign subsidiaries of the award debtor in English-seated arbitration

The Commercial Court has held that it has no jurisdiction to make a freezing order to aid the enforcement of a London-seated arbitration award against subsidiaries of the award debtor who have no presence or assets within the jurisdiction, who were not party to the arbitration agreement or the arbitration proceedings and against whom no substantive claim is asserted (decision of 11 November 2014, Cruz City 1 Mauritius Holdings v. Unitech Limited et al. [2014] E.W.H.C. 3704 (Comm.)).

This is a significant decision as it shows the limits of how far the English court is willing to go in order to assist in the enforcement of an arbitral award. Parties seeking enforcement of an arbitral award in England and Wales against a counterparty with foreign subsidiaries who are not a party to the arbitration will most likely be unable to obtain a freezing order against those subsidiaries to aid enforcement.

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Lorand Shipping v Davof Trading (Africa) B.V. (MV “Ocean Glory”): when a “creative solution” on the part of the tribunal becomes a serious irregularity leading to substantial injustice

In a rare example of a successful application under section 68 of the English Arbitration Act 1996 (the “Act”), the English Commercial Court has granted an order setting aside part of a final award and remitted the matter to the tribunal.

The circumstances which led to the application concerned a dispute under a charterparty between the Owners (Lorand Shipping) and the Charterers (Davof Trading (Africa) B.V.). The Owners referred a claim for demurrage to arbitration and, in a rather unclear Claim Submission, asked the tribunal to reserve its jurisdiction in relation to other claims which were as yet unparticularised and unquantified. The Charterers asked the tribunal to dismiss all such claims on their merits. The tribunal issued a final award which did neither. Instead, the tribunal refused to reserve its jurisdiction and, without regard to a contractual time bar, envisaged that any other claims would be brought in a new arbitration.

The English Commercial Court found that the tribunal’s approach, which had been without proper notice and without having given the parties opportunity to address the course of action which neither of them had advocated, constituted a serious irregularity. The fact that the Owner’s claims were now shut out constituted a substantial injustice and the offending paragraphs of the award were remitted back to the tribunal.

The case serves as a reminder to arbitrators that parties must be given opportunity to consider and address a course of action not advocated by either of them, even if the course of action may objectively be considered a practical solution to their collective benefit.

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A breakthrough for Financial Services Arbitration?

Nicholas Peacock, Dominic Kennelly and Emily Blanshard consider the arbitral award and judgment of the English High Court in Travis Coal Restructured Holdings LLC v Essar Global Fund Ltd – which suggest that summary procedures may be available to tribunals in appropriate cases – and their implications for the use of arbitration by banks and other  financial institutions.

To read the full article please click here.

Nicholas Peacock
Nicholas Peacock
Partner
+44 20 7466 2803
Dominic Kennelly
Dominic Kennelly
Associate
+44 20 7466 7597

Emily Blanshard
Emily Blanshard
Associate
+44 20 7466 2833

 

 

 

 

 

This article has been reproduced with the kind permission of Global Arbitration Review and was first published in GAR MAGAZINE VOLUME 9 ISSUE 5.

English Court finds that it is “just and convenient” to grant a worldwide freezing order in support of London-seated arbitration even where all assets are outside England

In a further decision in the case of U & M Mining Zambia Ltd v Konkola Copper Mines PLC [2014] All ER (D) 136 (Oct), the English Commercial Court granted U&M Mining Zambia Ltd (“U&M”)’s application to continue a Worldwide Freezing Order (“WFO”) over the assets of Konkola Copper Mines PLC (“KCM”). U&M had been granted the WFO on an ex parte basis to prevent KCM’s dissipation of assets before it had satisfied the various arbitration awards granted by a London-seated tribunal (the “Awards”). For the background to the case, see our blog posts here, here and here.

The Court upheld the application. Where the seat of arbitration is London, it will ordinarily be appropriate for the English court to issue orders in support of the arbitration, but there may be reasons why, notwithstanding that the seat is in England, that it is not appropriate. A WFO, being an order which operates in personam by requiring the defendant not to dissipate his assets in a way that will render enforcement impossible or more difficult, is conceptually different from enforcement of an award, which requires an asset to be attached. The mere fact that enforcement will take place in Zambia was thus insufficient to make it inappropriate to grant a WFO. Even if the Zambian Court could also grant a freezing order, this did not make it inappropriate for the English court to do so.

This case confirms that a WFO in support of sums awarded by a London-seated tribunal can be granted by the English court, even if the assets against which the award will be enforced are outside the jurisdiction and it may be appropriate for another court to grant that same relief. The willingness of the English court to issue such relief should provide reassurance to parties who choose to seat their arbitrations in London, even where the contractual arrangements and/or the assets against which an award will ultimately be enforced are located outside England.

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Thwarting attempts to avoid execution: English Court orders appointment of receivers over foreign assets to assist enforcement of a London award

In a judgment handed down on 2 October 2014 in Cruz City 1 Mauritius Holdings v Unitech Limited & Ors, the English High Court made an order under s37 of the Senior Courts Act 1981 for the appointment of receivers over the foreign assets of two foreign Defendants, as well as ancillary orders it considered necessary to render that order effective, to assist the Claimant in realising an arbitration award in its favour. In doing so, the English Court emphasized yet again its commitment to the policy that arbitration awards should be enforced.

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A unique interactive convention: Shaping the Future of International Dispute Resolution

A convention being held next month at the Guildhall, London, on Shaping the Future of International Dispute Resolution will bring together an extensive cross-section of ADR and arbitration service providers, corporate users and thought leaders to discuss the future direction of international dispute resolution (IDR) mechanisms.

The Lord Mayor of London is supporting the convention as the keynote speaker and Herbert Smith Freehills is delighted to be the platinum sponsor.

Organised by the International Mediation Institute, the IDR Group and the Centre for Effective Dispute Resolution, the convention has been brought together with the cooperation of a host of other leading ADR and arbitration institutions and users from across the globe (listed below).   With panellists and speakers from BP, Shell, BT, Standard Chartered Bank, GE, Orange, Marks and Spencer, Hinduja Group, Thales and Northrop Grumman, this will be an occasion for corporate users of ADR and arbitration to discuss with their peers – and to influence – the way forward for IDR.

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English Commercial Court rejects challenge to “conditional” award

In the latest decision relating to the arbitration between U&M Mining Zambia Ltd (“U&M”) and Konkola Copper Mines plc (“KCM”), the Commercial Court in London rejected challenges to an award made under s67 and s68 of the Arbitration Act 1996 (the “Act”).

The award included an order for KCM to pay certain invoices unless KCM “showed cause, supported by evidence, within 14 days of the Award, why such an order should not be made”. Amongst other grounds, KCM relied on the fact that the award was “conditional” and therefore “legally defective” as a ground to challenge the award under s68. The Commercial Court disagreed, stating that an award can be final and conclusive in its terms where it provides for “specific relief […] which only bites at one point in the future”.

(U&M Mining Zambia Ltd v Konkola Copper Mines plc [2014] EWHC 2374 (Comm))

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