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.

Continue reading

English Court rejects section 68 challenge on the primary ground that the Tribunal’s decision was a Procedural Order and not an Award

In the recent case of ZCCM Investments Holdings PLC v Kansanshi Holdings PLC & Anor [2019] EWHC 1285 (Comm), the English Court (the Court) rejected a challenge under s.68 of the English Arbitration Act 1996 (the Act) and provided useful guidance on the test for determining whether a tribunal’s decision qualifies as an award for the purpose of a s.68 challenge.

Continue reading

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.

Continue reading

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.

Continue reading

ENGLISH COMMERCIAL COURT GRANTS PERMISSION TO THE CHARTERED INSTITUTE OF ARBITRATORS TO OBTAIN COPIES OF DOCUMENTS ON THE COURT’S RECORDS FOR DISCLIPLINARY PROCEEDINGS AGAINST AN ARBITRATOR

In The Chartered Institute of Arbitrators v B, C, D [2019] EWHC 460 (Comm), the Commercial Court granted an application made by the Chartered Institute of Arbitrators (the CIArb) under CPR 5.4C for permission to obtain copies of certain court records, to be produced in disciplinary proceedings against a CIArb member. The Court found that the public interest in ensuring CIArb members meet their professional standards outweighed the confidential nature of the arbitration, and allowed the disclosure of certain documents which were on the court’s records and which had originally been produced during an arbitral hearing.

Continue reading

ENFORCING FOREIGN ARBITRAL AWARDS IN RUSSIA: SURVEY FROM THE RUSSIAN ARBITRATION ASSOCIATION

In late November 2018, the Russian Arbitration Association (“RAA”) published a detailed study on the application of the New York Convention in Russia between 2008 and 2017. The Working Group of the RAA analysed 10 consecutive years of case law on the recognition and enforcement of foreign arbitral awards in the Russian courts. The study provides valuable statistical data on the success rates of Russian enforcement proceedings under the New York Convention and uncovers interesting trends for those looking to enforce in the jurisdiction.

Continue reading

INDIAN SUPREME COURT RULES THAT PRE-DEPOSIT REQUIREMENT IN AN ARBITRATION AGREEMENT IS UNCONSTITUTIONAL

In a decision of 11 March 2019, the Supreme Court of India (the “Court“) struck down part of an arbitration clause which required a claimant to deposit 10 per cent of the amount claimed with the arbitrator before the arbitration went ahead. The contract was between a government entity and a private party and the Court relied on principles of Indian constitutional and administrative law to hold that the clause was arbitrary and therefore liable to be struck down. The Court also emphasised the need for arbitration to be speedy, effective and inexpensive so that it can “de-clog” the overburdened court system in India. This is an important decision for parties with arbitration agreements with Indian state or state-owned entities, and another encouraging indicator of the pro-arbitration mindset shown by the highest echelons of the Indian judiciary.

Continue reading

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.

Continue reading

Advocate General finds that CETA’s “Investment Court System” is compatible with EU law

One of the Advocates General to the Court of Justice of the European Union, Advocate General Bot, has issued an opinion confirming that the mechanism for the settlement of disputes between investors and states provided for in the Comprehensive Economic and Trade Agreement  between the EU and Canada (the CETA) is compatible with European Union law.

We discuss the content of the Advocate General’s opinion on our new blog piece, published on our Public International Law blog here.

For further information please contact Andrew Cannon, Partner, Hannah Ambrose, Senior Associate, Vanessa Naish, Professional Support Consultant, Rebecca Warder, Professional Support Lawyer, or your usual Herbert Smith Freehills contact.

Andrew Cannon
Andrew Cannon
Partner
+44 20 7466 2852
Hannah Ambrose
Hannah Ambrose
Senior Associate
+44 20 7466 7585
Vanessa Naish
Vanessa Naish
Professional Support Consultant
+44 20 7466 2112
Rebecca Warder
Rebecca Warder
Professional Support Lawyer
+44 20 7466 3418

English court provides new guidance on summary dismissal process for groundless serious irregularity challenges

The English High Court has in the last few days proposed a procedurally strict approach to serious irregularity challenges under s68 of the Arbitration Act 1996 where these have already been dismissed on paper. The decision in Midnight Marine Ltd v Thomas Miller Speciality Underwriting Agency Ltd [2018] EWHC 3431 (Comm) suggests that the court should take a more active role in preventing such hearings from escalating into a full s68 challenge hearing (case available here).

The High Court’s earlier decision in the case of Asset Management Corporation of Nigeria v Qatar National Bank [2018] EWHC 2218 (Comm) covered in our previous blog post, demonstrated the difficulty in disposing of bad s68 challenges quickly. This judgment emphasised that an oral hearing will usually be granted after a challenge is thrown out on paper, unless the case is “something akin to vexatious“. In this case, the summary dismissal of the s68 challenge was nevertheless followed by two further applications, and an oral hearing, before the challenge was finally thrown out.

Both of these recent cases promote the summary dismissal process in paragraph O8.5 of the Commercial Court Guide as a useful tool for weeding out unmeritorious s68 challenges, but the decisions differ on how to treat applications to set aside orders dismissing such challenges. The decision in Midnight Marine v Thomas Miller takes a tougher line than the earlier Asset Management Corporation of Nigeria v Qatar National Bank decision, suggesting that the oral hearing referred to in the summary dismissal process should be a very short hearing, directed only at the question of whether the application has a real prospect of success.

Continue reading