Arbitration Law Monthly

In A Lloyd’s Syndicate v X [2011] EWHC 2487 (Comm), Teare J was asked to grant an injunction to restrain the defendant, an expert witness, from giving evidence as to the construction of a clause in a reinsurance contract. The expert had discussed that very wording with the claimant’s solicitors two years earlier, but in the context of a different arbitration in which the expert was acting for the claimant. Teare J refused relief on the facts and did not address wider jurisdictional issues.

A freezing order made by way of security for arbitration or judicial proceedings will generally contain an exception under which the defendant is entitled to deal with its assets in the ordinary course of business. The purpose of the exception is to make sure that the claimant does not obtain undeserved security over other unsecured creditors. Once the proceedings are complete, any freezing order has a rather different function, in that it is security for execution, so that the exception may be inappropriate. The question before the Court of Appeal in Mobile Telesystems Finance SA v Nomihold Securities Inc [2011] EWCA Civ 1040 was whether a freezing order made at the same time as an order giving permission for the enforcement of an arbitration award should contain the exception. The Court of Appeal held that, until the time for applying to set aside the enforcement order has expired, the order is not final as such and the creditor is in the same position as a contractual creditor rather than a judgment creditor, so that the exception should be included.

An arbitrator may be removed under the Arbitration Act 1996 if there are justifiable doubts as to his impartiality. In A and Ors v B and Anr [2011] EWHC 2345 (Comm), Flaux J rejected the suggestion that there were justifiable doubts as to the impartiality of a barrister sitting as an arbitrator who was, at the same time, acting for the solicitors of one of the parties in entirely unrelated legal proceedings.

Where arbitrators have ruled that a contract is lawful, it will be difficult to sustain a challenge to the award. The challenge will have to be made on the ground that it would be contrary to public policy to enforce the award, and the definition of public policy in this context is a very narrow one. In AJT v AJU [2011] SGCA 41 the Singapore Court of Appeal, overturning the first instance decision of Chan Seng Onn J, [2010] SGHC 201, has upheld an arbitration award to which a public policy challenge was made, and has adopted the English law approach to intervention on public policy grounds.

In Deutsche Bank AG v Tongkah Harbour Public Co Ltd [2011] EWHC 2251 (Comm) there were three separate but related contracts between the parties, two of which contained arbitration clauses. The question for Blair J was whether a reference to arbitration in respect of one of the contracts amounted to a reference to arbitration under the other and, if so, whether judicial proceedings under the third should be stayed pending the completion of the arbitration.