Invalid service of Request for Arbitration not a failure of appointment procedure, says English court

In Global Aerospares Limited v Airest AS [2023] EWHC 1430 (Comm), the English Commercial Court dismissed a claim for directions under s18 of the Arbitration Act 1996 (Act). Failing to serve a Request for Arbitration under s14(4) of the Act, with the consequence that the process for the appointment of an arbitrator had not validly begun, was not considered a failure of procedure for the appointment of an arbitrator. Accordingly, s18 of the Act was not engaged and the claim was dismissed.

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In the recent decision in LLC Agronefteprodukt v Ameropa AG [2021] EWHC 3473 (Comm), the English Commercial Court (the ‘Court’) dismissed a jurisdictional challenge under section 67 of the Arbitration Act 1996 (the ‘Act’), finding that a single Notice of Arbitration validly commenced separate arbitration proceedings. The decision is of particular interest given that the Court reached a different outcome from the earlier decision of A v B [2017] EWHC 3417 (Comm) (blog post available here), in which the Court upheld a section 67 challenge in similar circumstances.


The Underlying Contracts and Disputes

Under two separate contracts of sale (the ‘Contracts‘), LLC Agronefteprodukt (the ‘Sellers‘) agreed to sell quantities of Russian Milling Wheat to Ameropa AG (the ‘Buyers‘). The Contracts both contained an arbitration clause which provided for arbitration under the GAFTA rules, seated in London.

The Buyers commenced arbitration in August 2018 under both Contracts in a single Notice of Arbitration (the ‘Notice‘). This Notice included a paragraph (the ‘Final Paragraph‘) which read “On a separate note, [the Buyer wondered] if, for efficiency and economy, [the Sellers] would accept the two contracts/disputes be adjudicated under a single arbitration and by the same Tribunal“. The Sellers did not respond, and an arbitrator for the Sellers was appointed by GAFTA.

In September 2018, the parties entered into negotiations and concluded an agreement (the ‘Washout Agreement’) under which the Sellers would pay a sum to the Buyers (the ‘Settlement Sum‘) to terminate the claim. The Sellers failed to make payment, and the Buyers continued the arbitration.

The Underlying Awards and S67 Challenge

The Sellers contended that the Tribunal lacked jurisdiction on the basis that the Buyers had failed to validly commence arbitration proceedings under each contract. They argued that the Notice was invalid as it illegitimately purported to commence a single arbitration in respect of claims under separate Contracts. Under the GAFTA Rules, the Sellers would have to consent to any such consolidation, which they did not. This jurisdictional challenge was rejected by the First Tier GAFTA Tribunal and the Appeal Board in their awards (the ‘First Tier Tribunal Award‘ and ‘Appeal Board Award‘ respectively).

The Sellers proceeded to challenge both the First Tier Tribunal Award and the Appeal Board Award under section 67 of the Act (the ‘Section 67 Challenge‘).

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Dubai Court of Cassation dismisses claim for damages made against arbitral tribunal

Dubai’s Court of Cassation dismisses Meydan Group’s claim against Doug Jones, Humphrey Lloyd QC and Stephen Furst QC who were acting as arbitrators in a dispute between Meydan Group and WCT Holding.

The United Arab Emirates (UAE), and Dubai in particular, is fast building a reputation as a preferred seat for international arbitration. It is, however, crucial in attracting users that the UAE courts are seen to be supportive of arbitration. The absence of UAE legislation granting immunity to arbitrators has recently created uncertainty for both arbitrators and parties engaged in arbitration in the UAE following two recent cases in which a party to Dubai International Arbitration Centre ("DIAC") arbitration proceedings brought proceedings in the UAE courts seeking damages against the sole arbitrator in one case and tribunal in the other.

This latest case was brought by Meydan Group against the arbitral tribunal. This case was concluded in December 2015 and is summarised below.

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