Legal News

SYL 1st Plaintiff LBL 2nd Plaintiff and GIF Defendant [2024] HKCFI 1324 What are the practical implications of this case? This decision underscores the importance of scrutinising how each arbitration clause operates in practice when deciding if one arbitration can proceed under several contracts. It calls for a careful, commercially grounded review of the clauses’ compatibility. That inquiry must be astute and anchored in a commercial context, with a focus on whether the clauses align. One must remember that an arbitration clause is a standalone contractual agreement; any core differences among arbitration provisions across a network of contracts, and their effects, should be assessed from the outset, namely during contract drafting and negotiation. Compatibility is not dictated by the clause’s form. Provisions that appear similar and use almost identical wording may, when combined, produce for a party an outcome that departs from what was...

SA 1st Plaintiff Y 2nd Plaintiff J 3rd Plaintiff and BH 1st Defendant GC [2024] HKCFI 1357 What are the practical implications of this case? The CFI may, under Order 23 of the RHC (security for costs), require security for a defendant’s costs where a plaintiff brings proceedings to set aside an arbitral award, despite the arbitration framework in Order 73 of the RHC. Practitioners should widen their focus beyond the powers under Order 73 relating to challenges to arbitral awards, and consider the Rules of the High Court as a whole, except where a rule expressly excludes such jurisdiction or makes it subject to other provisions of the RHC. Put differently, the court’s powers are not restricted to Order 73 unless an express limitation applies. Order 23 of the RHC enables the court, in defined circumstances, to order security for costs against a...

Eternity Sky Investments Ltd v Zhang ( Competition & Markets Authority intervening) [2024] EWCA Civ 630 Background Mrs Zhang executed a personal guarantee backing a convertible bond offering by a company listed in Hong Kong, in which, at the material time, she and her husband were referred to as ‘the majority shareholder couple’. She commenced arbitration in Hong Kong seeking to set aside the guarantee but was ultimately unsuccessful, and was ordered to pay Eternity Sky HK$500m (about £64m) together with interest. She then attempted to oppose enforcement of the award under section 103(3) of the Arbitration Act 1996, arguing that enforcement would offend public policy, on the footing that the essential provision of the guarantee infringed her rights under the Consumer Rights Act 2015 ( CRA 2015). Decision The first-instance judge concluded that Mrs Zhang qualified as a ‘consumer’, albeit not a...

Osler v Osler and others [2024] EWCA Civ 516 What are the practical implications of this case? This decision materially narrows the scope for a losing party in an arbitration seated in England to pursue an appeal on a point of law. AA 1996, s 69 is a tightly delimited appeal mechanism: parties may exclude it by agreement, and its remit is constrained by the need to show an award is ‘obviously wrong’ on a point of law, or that ‘the question is one of general public importance and the decision of the tribunal is at least open to serious doubt’ ( AA 1996, s 69(3)(c)). In addition, any appellant relying on AA 1996, s 69 must demonstrate ( AA 1996, s 69(3)): ‘the determination of the question will substantially affect the rights of one or more of the...

In this issue: Arbitration in England and Wales International arbitration Investment treaty arbitration Other arbitration and ADR-related news and developments Lex Talk®Arbitration: a Lexis®Nexis community Daily and weekly news alerts Arbitration in England and Wales LCAM— HSF—costs in mediation and arbitration survey The London Chamber of Arbitration and Mediation ( LCAM) and Herbert Smith Freehills ( HSF) have rolled out a survey examining the costs of mediation and arbitration. It welcomes input from arbitration and mediation users, mediators, in-house counsel and external counsel, inviting feedback on their experiences with cost-related matters. The survey closes on 31 July 2024. See: LNB News 18/06/2024 26. International arbitration Switzerland—setting aside—public policy | Bolivarian Republic of Venezuela v B In Switzerland, arbitral awards can be set aside where they conflict with public policy. However, a setting aside bid is not an ordinary appeal, which narrows the Swiss...

What are the practical implications of this case? From a pragmatic angle, because ‘public policy’ and any alleged breach are construed case by case, a party pursuing an exequatur of a composite judgment that aggregates several claims into a single lump sum should itemise the sum attributable to each separate decision. As the Superior Court does not revisit the merits and limits its review to checking whether the award satisfies the formal criteria of Brazilian Law and aligns with public policy, detailing the amounts per decision is sensible. If one or more claims are considered contrary to public policy, a partial exequatur may still be obtained for the unaffected claims. What was the background?......

Bolivarian Republic of Venezuela v B (4A_486/2023), Swiss Supreme Court What are the practical implications of this case? This ruling reinforces settled jurisprudence. Swiss arbitral awards are only exceptionally set aside for conflict with public policy ( Article 190(2)(e) Swiss Private International Law Act), for the reasons below. When faced with challenges based on alleged incompatibility with public policy, the Swiss Supreme Court confines its review to the operative result of the award and does not revisit the arbitral tribunal’s reasoning. The Court’s scrutiny is also narrowly circumscribed by procedure: every ground for setting aside must be demonstrated by reference to the text of the award itself; the arbitral case file is not taken into account. Accordingly, attempts to overturn awards on public policy grounds will rarely succeed under Swiss law, given the Court’s outcome-focused approach and its strict evidential limits......

Star Engineering Pte Ltd — Applicant; and (1) Pollisum Engineering Pte Ltd (2) Great Eastern General Insurance Ltd [2024] SGHC 137 What are the practical implications of this case? The High Court’s ruling reinforces the Singapore judiciary’s enduring commitment to honouring parties’ bargains to arbitrate—the courts will shield parties’ fundamental freedom to decide both the cause of action and the forum in which to proceed under valid arbitration agreements. In the more specific setting of resisting a call on a performance bond (which the Court described as a functional, mechanical instrument giving effect to the construction contract), the judgment delivers a firm message: notwithstanding a non‑exclusive jurisdiction clause in the bond, the Singapore court is ready to halt court proceedings in favour of arbitration. That stance holds even if the controversy could be resolved more quickly were it to be determined by the court on a...

Extramarks Education India Pvt Ltd v Saraswati Shishu Mandi.r O. M. P. ( T) ( COMM.) 13/2024 and O. M. P. ( T) ( COMM.) 14/2024a What are the practical implications of this case? This ruling makes clear that bringing an arbitrator’s mandate to an end does not terminate the arbitration. It simply leads to a substitute being appointed, who may carry on the reference from the point the former arbitrator stopped. Importantly, the decision reiterates that, under Sections 14 and 15 of the 1996 Act, an arbitrator’s mandate can be ended if they become non-responsive or fail to act. As the termination of the arbitrator’s mandate does not extinguish the arbitral proceedings, the replacement may proceed without retracing steps already completed by the predecessor. However, this mechanism for substitution does not operate where the mandate ceases solely because the...

This ruling provides legal clarity for Uniper. The firm disclosed that an arbitral decision handed down on 7 June 2024, previously unpublicised, empowered it to end its agreements with Gazprom, a step it took on 12 June 2024. According to its statement, the €13bn award represents financial compensation for the gas volumes withheld by Gazprom Export. Uniper also added that, despite Gazprom supplying only restricted quantities after June 2022 and ceasing deliveries entirely from September that year, the underlying contracts remained legally valid. The company said several of those commercial arrangements would otherwise have persisted into the mid‑2030s......

In this issue: Arbitration in England and Wales Arbitration under the Arbitration Act 1996 International arbitration Institutional and ad hoc arbitration Other ADR and arbitration-related news Lex Talk®Arbitration: a Lexis®Nexis community Daily and weekly news alerts Arbitration in England and Wales Crypto Arbitration—an in-depth review Conflicts involving crypto are increasingly channelled into alternative dispute resolution, particularly arbitration. That trend is unsurprising, reflecting both the broader uptake of crypto and the way arbitration accords with crypto’s underlying ethos. In their piece, Syed Rahman, partner, and Rhys Evans, associate, of Rahman Ravelli, assess the principal considerations that may shape the effectiveness of arbitration in crypto-focused disagreements. Refer to News Analysis: Crypto Arbitration—an in-depth review, authored by Syed Rahman, partner and Rhys Evans, associate, at Rahman Ravelli for further insight......

Law360 sat down with former Hong Kong International Arbitration Centre Secretary General Mariel Dimsey Last month, she took part in an experiment, chairing a moot arbitral tribunal where Chat GPT served as her fellow panellists. Her takeaway: while informative, chatbots remain outclassed by human arbitrators on numerous fronts. Dimsey, now the Hong Kong managing partner at CMS Hasche Sigle Hong Kong LLP, led the panel as highly qualified human teams pleaded the 20th Vis East Problem before her and the Chat GPT co-arbitrators. The Chat GPT arbitrators, dubbed Trinity and Neo, were operated via prompts by Cesar Pereira and Luisa Quintao, both from the Brazilian firm Justen Pereira Oliveira & Talamini. Having stepped down as secretary general of the Hong Kong International Arbitration Centre earlier this year, Dimsey recounted the exercise on a listserv connected to Transnational Dispute Management, a...

Crypto-related disputes are increasingly being referred to alternative dispute resolution, specifically arbitration. It is hardly unexpected, given the broader mainstream uptake of crypto and the way arbitration chimes with the sector’s ethos and practices. Many participants are drawn to crypto for its pseudonymity. That sits comfortably with arbitration’s confidentiality (though anonymity is not an automatic entitlement) and with the prospect of minimising recourse to national courts. This, in turn, can, at times, dampen governmental regulators’ anti‑crypto rhetoric. There are also inherent, practical advantages to using arbitration in crypto‑related disputes, including: greater flexibility in the process neutrality the ability to select arbitrators and constitute a tribunal tailored to the parties’ specific needs greater control over the disclosure process the choice of experts and the extent to which they are used control over the use of oral and written...

Every claim India advances for sovereign immunity are unavailing, ruled US District Judge Richard J. Leon in a 27 March 2024 opinion, chiefly because, as he noted, our circuit’s precedent nearly preordains the outcome here. Although foreign states are often shielded from litigation in US courts, there is a clear carve‑out in US courts for arbitration awards, Judge Leon further observed. Boiled down, the arbitration exception hinges on three jurisdictional facts, he explained: the existence of an arbitration agreement, an arbitration award, and a treaty that governs that award. Deutsche Telekom has carried its burden by producing evidence showing that all three are present in this matter, he concluded in this case here......

The Concepcion decision has, among other effects, made arbitration terms in consumer contracts increasingly prevalent and regularly enforced across the country. Though arbitration clauses are designed to give consumers a straightforward path to address their grievances, plaintiffs' lawyers have often submitted hundreds, if not thousands, of closely similar arbitration demands against target companies—using the prospect of eye-watering filing charges—to pressure high-value settlements. This fresh wave of mass arbitrations has prompted many retailers to wonder whether the upsides of arbitration clauses outweigh their potentially very costly downsides. Below, we briefly summarise the current landscape. The Mass Arbitration Threat Mass arbitration is a tactical manoeuvre in which plaintiffs' counsel lodges dozens, if not hundreds or thousands, of near-identical claims all at once. At thousands of dollars per claim—which can include administrative fees, hearing fees, professional fees associated with the arbitrator and more—these costs can swiftly mount to...

Sharp Corp Ltd v Viterra BV (previously known as Glencore Agriculture BV) [2024] UKSC 14 What are the practical implications of this case? The Judgment offers clear confirmation of key principles underlying AA 1996, s 69. Delivering the leading Judgment, Lord Hamblen emphasises the restricted nature of any right of appeal under the Act, together with the strong policy justifications for that restriction. The court’s conclusions also reflect the overarching tenet in AA 1996, s 1(c) that judicial involvement in arbitration should be confined to circumstances where it is truly required. Practitioners are likely to appreciate the Supreme Court’s additional guidance on the Gafta Default Clause, whose construction has long divided the arbitration community. In Bunge v Nidera BV [2015] UKSC 43, the Supreme Court stated that the compensatory aim of the law of damages is normally realised by contrasting the contract price with the price that...

Between CNA... Appellant And (1) CNB (2) CNC [2024] SGCA( I) 2 What are the practical implications of this case? This decision reaffirms the norm of restrained judicial interference in the running of arbitral proceedings. The principle of minimal curial intervention remains the touchstone in the conduct of arbitration in practice. Annulment of an award is a drastic step and will occur only where there are proper and cogent grounds. The court will examine the parties’ behaviour when assessing whether such grounds exist to justify setting aside an award. Here, in declining to set aside the awards, the Court of Appeal found that the obstinate parties had sought to engineer a jurisdictional challenge by executing a separate contract intended to override the initial arbitration agreement. The phrasing of a dispute resolution provision is likewise significant when deciding if it can touch...

US District Judge Lorna G. Schofield – 4 June 2024 On 4 June 2024, Judge Lorna G. Schofield directed New York‑headquartered Ui Path Inc to submit, by 18 June, a proposed judgment aligned with her opinion. She observed that respondent Shanghai Yunkuo Information Technology Co, trading as Encoo Tech, took part in the arbitration yet has not appeared in the court action and did not oppose Ui Path’s petition to confirm the arbitration. The judge recorded that the respondent engaged in the arbitration for two years, including a multi‑day evidentiary hearing in Manhattan. On 10 May 2023, the arbitrator issued a partial award on the merits, ruling in favour of the petitioner on both the breach claim and the misappropriation and related claims. As set out in the 4 June 2024 opinion and order, the partial arbitral award determined that Encoo had violated its...

In this issue: Arbitration in England & Wales International arbitration Investment treaty arbitration Institutional and ad hoc arbitration Other ADR and arbitration-related news Lex Talk®Arbitration: a Lexis®Nexis community Daily and weekly news alerts Arbitration in England & Wales Commercial Court— AA 1996, s 67— BIT award—addition of new ground of challenge—rejected In Czech Republic v Diag [2024] EWHC 708 ( Comm), the principal judgment of 8 March 2024 was delivered by Mr Justice Foxton in the English Commercial Court. Foxton J determined that the Czech Republic sought, belatedly, to introduce a fresh challenge under section 67 of the Arbitration Act 1996 concerning the second claimant’s true nationality—a point that was, in principle, capable of grounding a jurisdictional objection. However, the state, exercising reasonable diligence, could and should have identified this contention during the BIT arbitration itself....

Waterfront Property Investment Ltd v Arius Litigation Funding Ltd Claim, No BVIHCM 2023/0192 What are the practical implications of this case? This decision underscores the primacy of arbitration clauses and the court’s reluctance to intervene in disputes already before an arbitral tribunal. Where a binding arbitration agreement exists and there is a genuine and substantial controversy over what debt is due or payable, a Statutory Demand issued under the Insolvency Act must be set aside. Even in the absence of any substantial quarrel about the sum owed, the court retains a discretion to discharge the demand where doing otherwise would occasion substantial injustice. Further, if a party presses a Statutory Demand in respect of a liability that is the subject of ongoing arbitration, substantial injustice will be found where the evidence shows that the insolvency mechanism is being deployed for an...