EXPORTADORA DE SAL SA DE CV V CORRETAJE MARITIMO SUD-AMERICANO INC

[2018] EWHC 224 (Comm), Queen's Bench Division, Commercial Court, 9 February 2018, Mr Justice Andrew Baker

Arbitration - Jurisdiction to make award - Whether arbitration agreement binding on applicant - Whether applicant lost right to challenge award - Arbitration Act 1996, sections 31, 67 and 74

ESSA, a Mexican salt mining company part owned by the Mexican government, entered into a shipbuilding contract with CMSA in July 2014 under which ESSA was to purchase a salt barge. CMSA purported to terminate the contract on 27 May 2015, in the light of ESSA's failure to pay the second instalment of the price, and commenced arbitration in August 2015. The merits hearing was scheduled for September 2016. The OIC, a Mexican body regulating public procurement, adopted a Resolution on 16 November 2016 decreeing the nullity of the tender process under which CMSA had won the business by reason of non-compliance with legislative requirements. The final hearing of the arbitration commenced on 5 December 2016, although ESSA did not contest the arbitrator's jurisdiction and indeed submitted a counterclaim. It raised a jurisdictional objection 5 weeks after the Resolution was made. The arbitrator issued an award in favour of CMSA, which ESSA challenged on jurisdictional grounds under section 67 of the Arbitration Act 1996 in that the contract was void under Mexican law.