The English High Court (the Court) in Eleni Shipping Limited v Transgrain Shipping B.V.  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.
Tag: Rebecca Warder
In The Chartered Institute of Arbitrators v B, C, D  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.
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.
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.
In Koshigi Ltd and another company v Donna Union Foundation and another  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.
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.
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  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  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.
The odds of successfully challenging an arbitral award in the English Courts on the basis of s68 of the Arbitration Act 1996 (serious irregularity) remain low. In the recent past over 95% of s68 challenges have been unsuccessful and in the period from 2015 to 2017 only 3 out of 112 s68 appeals succeeded, approximately 2.7% of applications made.
However, the English High Court has recently set aside an arbitral award for serious irregularity under s68(2)(a) in the case of RJ and another v HB  EWHC 2833 (Comm). This case is a relatively rare and interesting example of a successful s68(2)(a) challenge.