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 UPHOLDS S68 CHALLENGE TO ARBITRAL AWARD AND CRITICISES TRIBUNAL FOR TWO-YEAR DELAY

An arbitral award was recently challenged in the English High Court (the Court) in K v P [2019] EWHC 589 (Comm). In a rare example of a successful challenge under s68 of the Arbitration Act 1996, the Court held that (i) the tribunal had failed to deal with an issue put to it, and (ii) the Claimants had been denied the opportunity properly to present their case. The Court remitted the award back to the tribunal, notwithstanding its review of the tribunal’s handling of the case and criticism of the two years taken to hand down its award.

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ENGLISH HIGH COURT DISMISSES S68 CHALLENGE TO ‘AMBIGUOUS’ AWARD

In Gracie and another v Rose [2019] EWHC 1176 (Ch), the English court dismissed a challenge to an arbitration award under s68 of the Arbitration Act 1996.

While the court found that the Arbitrator’s reasoning in relation to certain topics was ambiguous, it held that this was insufficient for a successful s68 challenge. The judgment contains useful guidance on the scope of s68 and its interplay with other provisions of the 1996 Act. In particular, the court emphasised that the applicant had an obligation to first request the arbitrator to correct, supplement or clarify the award under s57 before bringing a challenge in the courts.

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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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ENGLISH HIGH COURT GRANTS INJUNCTION TO BLOCK JORDANIAN PROCEEDINGS SEEKING TO INVALIDATE AN ARBITRATION AGREEMENT

On 1 March 2019 the English court granted the claimant, ACT, a permanent anti-suit injunction against proceedings issued in  Jordan (the Jordanian Proceedings) by the defendant, Soletanche (in Aqaba Container Terminal (PVT) Co v Soletanche Bachy France SAS). The Court found that the subject matter of the Jordanian proceedings fell within the scope of an arbitration clause agreed between ACT and Soletanche. Soletanche had relied in the validity of that arbitration clause in earlier ICC proceedings to claim damages from ACT (albeit unsuccessfully). It was therefore just in all the circumstances to issue an anti-suit injunction to prevent breach by Soletanche of the agreement to arbitrate and to halt its efforts to invalidate that agreement through the Jordanian Proceedings.

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Section 67 and 68 challenges to LCIA award dismissed

In the highly complex and contentious case of Filatona Trading Ltd and another v Navigator Equities Ltd and others [2019] EWHC 173 (Comm), the English High Court dismissed an attempted challenge to an LCIA award brought on the grounds of jurisdiction (s.67 Arbitration Act 1996) and serious irregularity (s.68 Arbitration Act 1996).

In particular, the Court held that an LCIA arbitral tribunal did not exceed the scope of its powers in ordering relief that was not available to an English court.

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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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English High Court recognises arbitral tribunal’s jurisdiction over settlement agreement in absence of express arbitration clause

In the recent decision of Sonact Group Limited v. Premuda SPA [2018] EWHC 3820 (Comm), the English High Court confirmed its pro-arbitration approach to the interpretation of arbitration agreements. The Court held that an arbitration agreement contained in a charterparty contract could apply in relation to disputes arising out of a subsequent settlement agreement contained in correspondence between the parties relating to the sum allegedly due under the charterparty. The Court concluded the parties could be taken to have intended that the arbitral tribunal under the principal agreement would also have jurisdiction over disputes arising out of a settlement agreement between the same parties, despite the absence of an express arbitration clause in the settlement agreement.

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English Court upholds on paper dismissal of serious irregularity challenge with no prospects of success

The English High Court’s decision in Asset Management Corporation Of Nigeria v Qatar National Bank [2018] EWHC 2218 (Comm), handed down in July 2018 but only recently published, concerned the court’s dismissal on the papers of an application under section 68 of the Arbitration Act 1996 on the basis that the application had no reasonable prospect of success (available here: https://www.bailii.org/ew/cases/EWHC/Comm/2018/2218.html).

The decision serves as an example of the court employing the summary procedure to dismiss a section 68 application on the papers, but the drawn out process highlights the practical difficulties in quickly disposing of meritless applications.

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English High Court refuses to set aside order for enforcement under s103 in long-running dispute regarding ICC award

The English High Court has refused an application under s.103 of the Arbitration Act 1996 (“AA 1996“) to set-aside an order allowing for the enforcement of an ICC award in England. The decision is the culmination of a long-running dispute in which the award debtor has sought to set-aside the award and prevent enforcement in France, the Seychelles and England. The judgement is the latest illustration of the pro-enforcement approach of the English courts with respect to international arbitral awards, particularly where an award debtor has made efforts in multiple jurisdictions to prevent enforcement against it. While the outcome is not surprising, the level of attention given to the grounds raised by the award debtor, even in the face of issue estoppel, demonstrates the importance placed by the English Court on its New York Convention obligations.

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