In Emirates Trading Agency LLC v Sociedade de Fomento Industrial Private Limited [2015] EWHC 1452 (Comm), the English High Court (the Court) dismissed an application under section 67 of the English Arbitration Act 1996 (the Act) to set aside an ICC award on grounds of lack of substantive jurisdiction.
The tribunal had made a partial award on jurisdiction (the Jurisdiction Award), which the applicant in the present case (the Buyer) had not challenged under the Act at the time. The tribunal was then reconstituted as the majority of arbitrators had to be replaced. The Buyer sought to challenge the award on the merits (the Final Award) issued by the reconstituted tribunal, on the ground (inter alia) that it lacked substantive jurisdiction. The Court found that as the Jurisdiction Award had not been challenged within the relevant time, it had become final and created an issue estoppel between the parties. In accordance with section 73(2) of the Act, this barred the Buyer from raising an objection to jurisdiction later.
This case reminds parties that all awards which are final as to the issues they determine – including partial awards issued under s47 of the Act – must be challenged in a timely manner under ss67 to 69 of the Act to avoid losing the ability to challenge the award.
It also demonstrates that additional time and costs can be incurred when parties do not draft their dispute resolution provisions in a clear and unambiguous manner, leaving scope for jurisdictional challenge. Further information about best practice for drafting escalation clauses can be found in our podcast here.
Interestingly, the Court also left open the possibility that difficulties in relation to the future enforcement of an award (in this case, said to arise because the tribunal was reconstituted before the Final Award was issued) could found a challenge under s68, although there was no decision on this point.
