Arbitral Tribunal

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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

An ICSID tribunal has unanimously rejected a claimant’s attempt to temporarily suspend a State-initiated criminal investigation involving two of its witnesses. In Italba Corporation v Uruguay[1] Italba Corporation (Italba) had applied to the tribunal for provisional measures enjoining Uruguay from proceeding with its investigation until after completion of the arbitration, arguing that the State’s conduct undermined the procedural integrity of the arbitral process.

Background

In the course of the arbitration, Italba filed witness statements by Dr Gustavo Alberelli and Mr Luis Herbón, an expert report and its exhibits. Shortly thereafter, an investigation was launched by the state prosecutor into allegations that some of the documents submitted by the claimant had been falsified and forged in contravention of the Uruguayan Penal Code. Mr Herbón was subsequently served with a notice to appear before a criminal court in Montevideo to give evidence, however neither he nor Dr Alberelli were charged or detained in connection with the investigation. Upon becoming aware of the notice, Italba requested that Uruguay terminate the criminal proceedings. After the State refused, Italba filed an application for provisional measures in the arbitration seeking to enjoin the investigation pending resolution of the arbitration.

By Daniel Harrison

A recent Commercial Court case emphasises the limitations on court intervention in arbitration, and demonstrates that parties must think carefully about when and how to raise jurisdictional issues.

In HC Trading Malta Ltd v Tradeland Commodities SL[1] the Commercial Court held that it would be wrong in principle for a court to grant declaratory relief in support of an arbitration clause, despite noting the court’s general jurisdiction to intervene.

The Facts and Judgment

The claimant, HC Trading Malta Ltd (HCT), applied for a declaration from the court that there was a binding contract of sale requiring the defendant Tradeland Commodities SL (Tradeland) to purchase goods from HCT and that the contract contained a binding arbitration clause. Tradeland denied any contract and sought to set aside the application on the basis that the court had no jurisdiction to grant the relief or should use its discretion to refuse it.

The Commercial Court set aside the application finding that if a claimant intends to refer a claim to arbitration and is able to commence the arbitration, the court should not intervene and should allow the tribunal to rule on jurisdictional issues. Therefore the proper course for HCT was to commence arbitration and ask the tribunal to deal with jurisdiction.