Arbitration Law Monthly

Under section 69 of the Arbitration Act 1996, subject to contrary agreement, there can be an appeal against the award of a tribunal for error of law. The cases make it clear that the jurisdiction of the court is limited to cases where the arbitrators have either applied the wrong legal test to their factual findings, or at least have purported to apply the right test but have done so in a way that shows that they did not really understand the correct test.

In Shipowners’ Mutual Protection and Indemnity Association (Luxembourg) v Containerships Denizcilik Nakliyat ve Ticaret AS (The Yusuf Cepnioglu) [2016] EWCA Civ 386, the Court of Appeal has upheld the first instance decision of Teare J, [2015] 1 Lloyd’s Rep 567, holding that an anti-suit injunction is in principle awardable against a third party who brings a claim in reliance on a contract containing an arbitration clause.

The decision of HHJ Waksman QC in Essar Oilfields Services Ltd v Norscot Rig Management PVT Ltd [2016] EWHC 2361 (Comm) is of crucial significance for the growing use of litigation funding. The court has confirmed that an arbitrator may include the enhanced costs of litigation funding in an ordinary award of costs in the arbitration, and that the arbitrator’s exercise of discretion is effectively beyond judicial review.

It is sometimes alleged that it is serious irregularity justifying the overturning of an award under section 68 of the Arbitration Act 1996 for an arbitral tribunal not to deal with a point that has arisen in the arbitration even though no reference has been made to it in the course of argument. This proposition amounts to a suggestion that the tribunal must draw the attention of a party to an advantageous point. It is disputed whether the arbitrators have any duty in this regard.

The English High Court in its recent judgments has affirmed that state immunity issues are crucial in arbitration-related enforcement proceedings. The court has clarified the scope of certain provisions of the State Immunity Act 1978 and the procedure to follow when filing an application without notice seeking enforcement against a state party.

The decision of Knowles J in W Ltd v M Sdn Bhd [2016] EWHC 422 (Comm) highlights a discrepancy between English law principles on the removal of an arbitrator for potential bias and the seemingly higher standards recognised by the International Bar Association. Knowles J in this case applied the common law and expressed the view that the IBA Rules were – in the context of the relationship of the arbitrator to affiliates of a party – too strict.

The courts have in many cases for well over a century discussed the difficult question of whether an arbitration clause has been incorporated into the agreement between the parties. Barrier Ltd v Redhall Marine Ltd [2016] EWHC 381 (QB), a decision of HHJ Behrens sitting as a Judge of the High Court in Leeds, is an excellent illustration of the principles, as it involves an arbitration clause allegedly agreed between the parties themselves and an arbitration clause incorporated from a separate contract involving only one of the parties.