REPUBLIC OF KAZAKHSTAN V WORLD WIDE MINERALS LTD AND ANOTHER

[2020] EWHC 3068 (Comm), Queen’s Bench Division, Commercial Court, His Honour Judge Pelling QC (sitting as a High Court Judge), 23 November 2020

Arbitration – Serious irregularity – Tribunal assessing damages on a basis not argued by the parties – Remission of award – Arbitration Act 1996, sections 33 and 68

In October 1996 World Wide Minerals Ltd (WWM), a Canadian company, entered into a Management Agreement with TRK, an agency of the Kazakhstan Government, for the acquisition and management of uranium mining and processing facilities, the TGK complex. TRK terminated the Management Agreement on 1 August 1997. Under the terms of a Bilateral Investment Treaty (BIT) between Canada and Kazakhstan, WWM commenced arbitration claiming damages on three grounds: expropriation of its investment by Kazakhstan’s failure to agree to WWM having access to the production of the Southern Mines; Kazakhstan’s failure or refusal to issue export licences in its favour in respect of a uranium sales contract; and Kazakhstan’s breach of its fair and equitable treatment obligation in the BIT to give timely notice to WWM of TGK’s pending insolvency. Damages were claimed on the basis that all three infringements had been established. The tribunal dismissed the primary expropriation claim but upheld the other two claims. In the absence of evidence of quantum based on the possibility that the claim had succeeded only in part, the tribunal awarded damages for loss of opportunity, a sum of US$13.7 million. That figure had not been argued for by WWM and disregarded WWM’s own approach which had been to ask the tribunal to come back to the parties on the damages question if some but not all of the alleged breaches were proven.