Arbitration Law Monthly

In the May 2011 issue of Arbitration Law Monthly, there was discussion of the decision of Vos J in Fulham Football Club (1987) Ltd v Richards [2010] EWHC 3111 (Ch). The learned judge there held that an arbitration clause which on its proper construction extended to unfair prejudice petitions under the Companies Act 2006 was not precluded by principles of nonarbitrability and public policy from requiring disputes falling within the clause from being arbitrated. Between the decision of Vos J and that of the Court of Appeal, the Singapore Court of Appeal in Larsen Oil and Gas Pte Ltd v Petroprod Ltd [2011] SGCA 21 considered at length the arbitrability of insolvency rules and drew a distinction between public and private law issues.

The principle that the parties intend their disputes to be resolved in a single forum, so that if there is an arbitration clause in the agreement it is to be construed generously in order to avoid fragmentation, has been established in English law since the decision of the House of Lords in Fiona Trust & Holding Corporation v Privalov [2008] 1 Lloyd’s Rep 254. However, that decision is relevant only where arbitration is the sole specified form of dispute resolution. If the parties have allocated different disputes to different resolution mechanisms, then Fiona Trust has no part to play. That is shown by the decision of Blair J in PT Thiess Contractors Indonesia v PT Kaltim Prima Coal and Anr [2011] EWHC 1842 (Comm).

Section 66 of the Arbitration Act 1996 provides a mechanism for the summary enforcement of English arbitration awards. Enforcement is to follow unless there is serious doubt as to the validity of the award. There is one specific statutory exception, in s66(3), which permits the court to refuse enforcement if it is shown that the arbitrators acted without jurisdiction. In Sovarex SA v Romero Alvarez SA [2011] EWHC 1661 (Comm) Hamblen J considered whether the right to contest the award on jurisdictional grounds had been lost and, if not, the effect of proceedings in Spain running parallel to the arbitration in which the validity of the arbitration clause had been raised.

Gao Haiyan v Keeneye Holdings Ltd, a decision of Reyes J in the Hong Kong Court of First Instance, 12 April 2011, contains important comments on the use of ‘med-arb’ and also on the ability of a court to refuse enforcement of a foreign award on public policy grounds even though the curial court has rejected an appeal against the award. The facts of the case were somewhat extreme, in that the so-called ‘mediation’ failed to comply with any of the usual characteristics of that process, but the approach of the court is of great interest.