Arbitral Award

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The Court’s ruling supports the general principle that costs follow the event.

By Oliver E. Browne and Robert Price

In Andrew Martin, Nicholas Greene, Coban 2017 LLP (formerly named Strutt & Parker LLP) v. Michael Harris [2019] EWHC 2735 (Ch), the English High Court held that any arbitration award as to costs stood or fell with the substantive award. Therefore, if the substantive award was overturned by the court, the costs award would cease to have effect, regardless of whether the costs have been dealt with in separate award.

By Robert Price and Eleanor Scogings

Two recent English court decisions provide useful reminders that parties to arbitration agreements must take care to properly serve arbitration proceedings on the other party. In doing so, parties will avoid the risk of the court setting aside an award on the grounds that service was defective and that the tribunal did not have jurisdiction.

In Sino Channel, the Court of Appeal confirmed that only in rare cases will an agent have anything other than express actual authority to accept service of a notice of arbitration.[1] However, in the unusual circumstances in Sino Channel, the Court of Appeal held that the agent had both implied actual and ostensible authority to accept service. In Glencore Agriculture, the High Court confirmed that a notice of arbitration sent by email to a junior employee is unlikely to amount to effective service, unless the nature of that individual’s role implies that they possessed authority to accept service on their employer’s behalf.

By Daniel Harrison

The High Court recently held that a party was not free to disclose an arbitral award even though that award had already entered the public domain. Notably, the ruling may have significant implications for parties considering whether or not to resolve disputes through arbitration.

Background: UMS Holdings Limited v Great Station Properties S.A.

UMS Holdings Limited challenged an arbitral award on the ground of serious irregularity under section 68 of the Arbitration Act 1996 before the High Court. Because the judge had quoted parts of the arbitral award in the judgment refusing the application,[1] UMS claimed that the award was a public document and that UMS could therefore use the award as it wished. The defendant, Great Station Properties, rejected this position and argued that the parties were still bound to keep the award confidential pursuant to Article 30 of the London Court of International Arbitration Rules (LCIA Rules), which provides:

“The parties undertake as a general principle to keep confidential all awards in the arbitration, together with all materials in the arbitration created for the purpose of the arbitration and all other documents produced by another party in the proceedings not otherwise in the public domain, save and to the extent that disclosure may be required of a party by legal duty, to protect or pursue a legal right, or to enforce or challenge an award in legal proceedings before a state court or other legal authority.”[2]

Great Station applied to the High Court for an order preventing UMS from using the award for any purpose other than the court proceedings or from disclosing the award to any third parties. In response, UMS claimed that the court should not issue an order for confidentiality because the award had entered the public domain by virtue of references, as well as quotation at the hearing and in the judgment in the court proceedings — thereby nullifying Article 30’s confidentiality obligations.

By Oliver Browne, Daniel Harrison, and Eleanor Scogings

The English High Court recently dismissed a challenge to an arbitral award, holding that the tribunal’s alleged failure to take account of evidence did not amount to a serious irregularity under section 68 of the Arbitration Act 1996 (the Act).[i]

The Challenge Under Section 68 (Serious Irregularity)

Great Station Properties S.A. and others (Great Station) entered into a joint venture agreement and an option agreement with UMS Holdings Ltd and others (UMS). A dispute arose and, in the subsequent arbitration, Great Station alleged that UMS had diverted profits and opportunities to UMS-associated companies in breach of the joint venture agreement, causing damage of US$55.8 million. Great Station alleged also that it was entitled to US$250 million pursuant to a put option under the option agreement. Great Station succeeded on both claims.

By Charles Rae

A High Court decision has reiterated the difficulties international parties face in enforcing in England awards set aside by courts at the seat of arbitration. In Maximov v OJSC Novolipetsky Metallurgichesky Kombinat[1] the Claimant had applied for enforcement of an award made by the International Commercial Arbitration Court of the Chamber of Commerce and Industry of the Russian Federation (‘ICAC’), notwithstanding that the award had been annulled by the Russian courts. The Claimant had argued that the perverse nature of the decisions annulling the award meant that they should not prevent the award being enforced in England. The High Court dismissed the application holding that the Claimant had failed to discharge the high threshold required in these circumstances to warrant enforcement of the award. There was no evidence that the annulment had been procured by actual bias and the decisions were not so extreme or incorrect as to lead to the conclusion that they had not been made by the Russian court in good faith.

By Catriona E. Paterson

In its recent decision in L R Avionics Technologies Limited v. The Federal Republic of Nigeria & Attorney General of the Federation of Nigeria[1], the Commercial Court found that that premises owned by Nigeria were not “in use […] for commercial purposes” within the meaning of section 13(4) of the State Immunity Act (SIA) and therefore were not capable of being attached in proceedings for the enforcement of an arbitral award and judgment against the State.

In consequence, although successful in an underlying arbitration, L R Avionics Technologies Ltd (the Claimant) had its attempts to enforce its arbitral award frustrated by the rules of State immunity from enforcement as articulated in the SIA.