Recent Developments in International Arbitration Raymond Cox QC

Recent Developments in International Arbitration Raymond Cox QC Fountain Court Chambers

Section 44 of the Arbitration Act 1996 provides that: “(1) Unless otherwise agreed by the parties, the court has for the purposes of and in relation to arbitral proceedings the same power of making orders about the matters listed below as it has for the purposes of and in relation to legal proceedings. […] (3) If the case is one of urgency, the court may, on the application of a party or proposed party to the arbitral proceedings, make such orders as it thinks necessary for the purpose of preserving evidence or assets. ”

Interim relief under section 44(3) Doosan Babcock Ltd v Commercializidora de Equipos y Materiales Mabe [2013] EWHC 3010 (TCC) (‘Doosan Babcock’)

Doosan Babcock [2013] Mr Justice Edwards-Stuart: “[31] … A contractual right is not preserved if a failure to give effect to it would destroy much or all of its value. [32] So, if the requirements of urgency and necessity are met, this is a case where in my judgment the court has the power to grant an injunction under section 44(3). I do not accept Mr. Choat’s submission that because the Taking-Over Certificates, once issued, will still have many consequences apart from causing the guarantees to expire, there is no need for any steps to protect the Claimant’s right to have the certificates issued. ”

Enforceability of arbitration awards PJSC Vseukrainskyi Aktsionernyi Bank v Maksimov [2013] EWHC 3203 (Comm)

PJSC v Maksimov [2013] EWHC 3203 (Comm) Mr Justice Blair: “[80] The result is that there is no binding authority on this point. I consider, however, that Tedcom is supportive of the view that, in a proper case, there is power to order service out of the jurisdiction under CPR 62. 5(1)(b) on a defendant, albeit the defendant is not a party to the arbitration agreement. Clearly this is not a power to be exercised lightly, but there are reasons for thinking that this may be the right analysis. Where it can be demonstrated to the requisite standard that a company is owned and controlled by a party to the arbitration agreement in the sense used in the Chabra case, there may be good reason for the court of the seat of the arbitration to stop that company from dissipating its assets if that would render enforcement of an eventual award nugatory. ”

Enforcement of arbitral awards and costs Caucedo Investments Inc & Anor v Saipem SA & Anor [2013] EWHC 3375 (TCC)

Section 68 of the Arbitration Act A serious irregularity is defined in section 68(2) of the Arbitration Act 1996 as including any of the following, where it has or will cause substantial injustice: Failure by the tribunal to comply with section 33 (general duty of tribunal) � The tribunal exceeding its powers (otherwise than by exceeding its substantive jurisdiction – see section 67) � Failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the parties � Failure by the tribunal to deal with all the issues put to it � The tribunal exceeding its powers in relation to the proceedings � Uncertainty or ambiguity as to the effect of the award � The award being obtained by fraud or being procured contrary to public policy � Failure to comply with the requirements as to the form of the award � Any irregularity in the conduct of the proceedings or in the award, which his admitted by the tribunal �

Section 68(2)(d): “failure by the tribunal to deal with all the issues that were put to it” Primera Maritime (Hellas) Limited & Ors v Jiangsu Eastern Heavy Industry Co Ltd & Ors [2013] EWHC 3066 (Comm)

Primera Maritime [2013] Mr Justice Flaux: “[40]. . . even if [the tribunal’s conclusion] could be said to be surprising or unusual or even wrong, it is a conclusion of fact, which is not susceptible to review by the court whether under section 68 or otherwise. There is no merit in Mr Bright’s suggestion that in some way that conclusion is so perverse that the tribunal cannot have dealt with the issue. ”

Primera Maritime [2013] Mr Justice Flaux: “[49] Even if the tribunal had overlooked a particular piece of evidence in reaching its findings of fact, that is not susceptible to challenge under section 68 or otherwise. ”

Admiralty & Commercial Court Guide Paragraph O 8. 8: “If the nature of the challenge itself or the evidence filed in support of it leads the court to consider that the claim has no real prospect of success, the court may exercise its powers under rule 3. 3(4) and/or rule 23. 8(c) to dismiss the application without a hearing…”

Section 69 of the Arbitration Act 1996 Section 69(3): “Leave to appeal shall be given only if the court is satisfied – (a) that the determination of the question will substantially affect the rights of one or more of the parties, (b) that the question is one which the tribunal was asked to determine, (c) that, on the basis of the findings of fact in the award – (i) the decision of the tribunal on the question is obviously wrong, or (ii) the question is one of general public importance and the decision of the tribunal is at least open to serious doubt, and (d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question. ”

Successful section 69 appeal Cottonex Anstalt v Patriot Spinning Mills Ltd [2014] EWHC 236 (Comm)

Cottenex Anstalt [2014] EWHC 236 Mr Justice Hamblen: “[74] I do not therefore consider that this is a case where it has been shown that one interpretation makes more business common sense than the other. Further, even if [the respondent’s] interpretation makes more commercial sense the difference is marginal and it is not sufficient to mean tha tit would be appropriate to prefer that interpretation given that there is little, if any, ambiguity about the words used. ”

Conclusion General themes: �Section 68 challenges and section 69 appeals remain rarely successful, albeit with a few exceptions. �Courts are increasingly willing to use the rules at their disposal to ensure that arbitration awards in England are properly enforceable against foreign individuals and companies.