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Category Archives: Legal Developments and Cases

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New effort to control time and cost in arbitration – the Prague Rules

The draft ‘Rules on the Efficient Conduct of Proceedings of International Arbitration’ (the “Prague Rules“), which were released on 1 September 2018, makes for sombre reading for users of arbitration. It comments that “it has become almost commonplace these days that users of arbitration are dissatisfied with the time and costs involved in the proceedings”. Indeed, interviewees of the 2018 Queen Mary survey on International Arbitration said that “the default mindset that an arbitration would last for up to 18 months should be challenged”. Set to launch in December 2018,

Hong Kong court refuses to enforce an arbitral award on the basis of violation of public policy

In Z and Y [2018] HKCFI 2342, the Hong Kong Court of First Instance (“CFI”) refused to recognize and enforce an arbitral award (“Award”) of the China Guangzhou Arbitration Commission (“Commission”) on the basis that enforcement under section 95(3)(b) of the Hong Kong Arbitration Ordinance would be contrary to the public policy of Hong Kong.  This is a rare example of the Hong Kong courts invoking such ground.  The judgment also dealt with commonplace arguments to challenge jurisdiction and enforcement, which will be of interest to arbitration users. Background The

The long reach of US discovery: Commercial Court allows enforcement of 28 USC §1782 discovery order

In recent years, US federal procedural law has emerged as a powerful weapon in cross-border disputes. In particular, section 1782 of Title 28 of the United States Code (28 USC §1782) allows district courts in the US to order the discovery of evidence for use in foreign and international proceedings – including, according to several courts, foreign-seated arbitrations. The recent Commercial Court decision in Dreymoor Fertilisers Overseas Pte Ltd v EuroChem Trading GmbH [2018] EWHC 2267 (Comm) is a useful example of how the English courts will exercise their supervisory

Latest developments in the Sanum saga: application to refuse enforcement rejected

In what has been a long-standing dispute comprising several applications before the courts of Singapore and Hong Kong, the Singapore High Court has rejected an application to refuse enforcement of an arbitral award for US$200 million in damages. The application to refuse enforcement was made pursuant to Article 36(1) of the UNCITRAL Model Law on International Commercial Arbitration (Model Law), which forms part of Singapore’s International Arbitration Act. The applicant argued that: The award was made pursuant to an arbitration agreement (or agreements) to which not all the award debtors

Reform of the Arbitration Act 1996 and confidentiality: it’s not all about an opt-in

In December 2017, the Law Commission launched its Thirteenth Programme of Law Reform. In it, the Law Commission suggests that it might be time to reform the English Arbitration Act 1996 (AA 1996). Much has been written about what those reforms might entail. A popular suggestion is that it is time to reverse, through statute, the presumption that arbitration is a confidential process. It is said by those pressing for reform that commercial arbitration suffers from both a lack of transparency and a legitimacy deficit, and that it is also

Court of Final Appeal extends time for First Media to challenge enforcement orders and judgment

In Astro Nusantara International B.V. and Others v. PT First Media TBK [2018] HKCFA 12; FACV 14/2017 (11 April 2018), Hong Kong’s highest court the Court of Final Appeal (“CFA“) handed down its decision on 11 April 2018 in a long-running dispute between members of a Malaysian media group (“Astro”) and First Media, a company that is a part of an Indonesian conglomerate referred to as Lippo.  The issue before the CFA concerns the refusal of the time extension to set aside the Hong Kong enforcement orders and judgment. The

Winding-up Petition v Arbitration Clause: Hong Kong Court Dismisses Winding-up Petition in Favor of Arbitration Clause

On 2 March 2018, the Hong Kong Court of First Instance (“CFI“) issued a notable decision which signifies a development of Hong Kong law in the contexts of insolvency and arbitration.  The CFI held in Lasmos Limited v Southwest Pacific Bauxite (HK) Limited [2018] HKCFI 426 that a winding-up petition issued on the ground of insolvency should generally be dismissed if there is an arbitration clause contained in an agreement giving rise to a debt relied on to support the petition.  This is a deviation from Hong Kong’s previous position

CJEU judgment changes landscape for investor-State arbitration in the EU

On 6 March 2018 the Court of Justice of the European Union (“CJEU”) issued its judgment in Case C-284/16 Slovak Republic v Achmea BV.  The CJEU ruled that investor-State arbitration clauses in investment treaties concluded between EU Member States (“intra-EU investment treaties”) are incompatible with EU law.  Before this landmark judgment of the CJEU, international arbitral tribunals and courts considered such clauses to be compatible with EU law. The underlying case In 2012, Achmea BV, a Dutch Insurer, won a EUR 22 million arbitral award over measures taken by the

OHADA Arbitration: Reforms adopted to keep the system modern

An updated framework for arbitration The twin pillars of OHADA – the Uniform Act on the Law of Arbitration and the Rules of Arbitration of the CCJA – have now been updated. On 15 March 2018, three new texts adopted by the OHADA Council of Ministers will enter into force. A revised Uniform Act on Arbitration Law, the revised Rules of Arbitration of the Common Court of Justice and Arbitration (“CCJA”) and a new Uniform Act on Mediation. The revised texts were adopted by the Council in November 2017 and

A Cautionary Tale for Commencing Multi-Contract Arbitrations

It’s unusual for English courts to set aside an arbitral award, but the Commercial Court did just that in the recent case of A v B [2017] EWHC 3417 (Comm). It warned parties entering arbitration not to assume a single arbitration will cover disputes between the same parties under multiple contracts. Two issues came up: whether a single request for LCIA arbitration would include disputes under separate contracts; and what timings the respondent would have to abide by to challenge an arbitration request.   The dispute A buyer and seller

Arbitrator bias: should we judge a book by its cover?

This blog post was first published on the Practical Law arbitration blog. Tribunals have a fundamental duty to act fairly and impartially under section 33(1)(a) of the English Arbitration Act (“AA 1996“). Where a party feels an arbitrator is failing in their duty, pursuant to section 24(1)(a) of the AA 1996: “A party to arbitral proceedings may… apply to the court to remove an arbitrator on any of the following grounds – that circumstances exist that give rise to justifiable doubts as to his impartiality…” English law stipulates a clear,

Legal advice privilege in England and the “closest connection” test

This blog post was first published on the Practical Law arbitration blog. English-seated arbitral tribunals have a great degree of flexibility in determining the applicable rules of privilege. Pursuant to sections 34(1) and 34(2)(d) of the Arbitration Act 1996 (“AA 1996“): “It shall be for the tribunal to decide all procedural and evidential matters, subject to the right of the parties to agree any matter”, including “whether any and if so which documents or classes of documents should be disclosed between and produced by the parties and at what stage.”

Arbitration: a new forum for business and human rights disputes?

This blog post was first published on the Practical Law Arbitration Blog. On 27-29 November 2017, the United Nations Forum on Business and Human Rights will convene in Geneva. Its central theme: Access to Effective Remedy. In line with this shifting focus by the international community on the third pillar of the UN Guiding Principles on Business and Human Rights (UNGPs), a working group of international law specialists published a proposal to use arbitration to resolve disputes that arise out of human rights abuses involving businesses (BHR disputes). The proposal for the

Hong Kong Court Refuses to Grant Crown Immunity to PRC State-Owned Enterprise

In TNB Fuel Services SDN BHD v. China National Coal Group Corporation HKCFI 1016 (“TNB Case“), the Court of First Instance (“CFI“) ruled that a PRC state-owned enterprise (“SOE“) was not entitled to Crown immunity. It upheld an arbitration award to be enforced against the SOE’s assets in Hong Kong. The TNB Case clarifies the position that any assertion of Crown immunity must come from the Crown; in this case by the Central People’s Government (“CPG“). SOEs will unlikely be granted Crown immunity, entitlement to which will be assessed by

PRC Court refuses to enforce SIAC arbitral award made by one arbitrator under expedited arbitration procedures when arbitration agreement provided for three arbitrators

In Noble Resources International Pte. Ltd v. Shanghai Good Credit International Trade Co., Ltd. (2016) Hu 01 Xie Wai Ren No. 1, the Shanghai No.1 Intermediate People’s Court in a judgment dated 11 August 2017 refused recognition and enforcement of a Singapore International Arbitration Centre (“SIAC“) arbitral award under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (“New York Convention“) on the basis that the composition of the arbitral tribunal and/or the arbitral procedure was not in accordance with the agreement of the parties.

Will life sciences provide a growth injection for international arbitration?

This blog post was first published on the Practical Law Arbitration blog. The use of international arbitration has expanded over the years to encompass a wide array of sectors. For example, while the majority of financial services disputes still end up in court, many of them are submitted to arbitration. Of the London Court of International Arbitration’s (LCIA’s) caseload in 2016, 20% comprised of such disputes. This was more than either construction or shipping. This raises the question of which other industry sectors might provide a larger number of arbitrations

ICC opens in the Abu Dhabi Global Market

The International Chamber of Commerce (“ICC“) has announced that it will open a new arbitration centre in the Abu Dhabi Global Market (“ADGM“), Abu Dhabi’s financial freezone located in the Al Maryah Island, which began operating in 2014. The centre will be known as the ADGM Arbitration Centre and is expected to open for business in January 2018. The ICC is a reputable and leading international arbitral institution with its headquarters in Paris. The ADGM Arbitration Centre will be the ICC’s third representative office worldwide – joining Shanghai and Sao Paolo

Hong Kong court appoints receivers to preserve assets in aid of arbitral proceedings in China

The Hong Kong High Court has appointed receivers over shares in a Hong Kong company as an interim measure to preserve the status quo and the value of the shares, pending the outcome of CIETAC arbitration proceedings in mainland China. The decision provides useful guidance on how parties can seek interim relief in aid of foreign arbitral proceedings, particularly in Mainland China or other jurisdictions that do not have comprehensive provisions for granting interim relief to preserve of assets pending the outcome of arbitral proceedings. In particular, the judge noted

Updates to Hong Kong Arbitration Ordinance: third party funding and arbitration over IP rights

On Wednesday, 14 June 2017, two sets of amendments to Hong Kong’s arbitration law were passed to clarify that: third party funding of arbitration, mediation and related proceedings is permitted under Hong Kong law, and disputes over intellectual property rights (“IPRs“) can be resolved through confidential arbitration and that it is not contrary to the public policy of Hong Kong to enforce arbitral awards involving IPRs. The relevant bills were the Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Bill 2016 (“Third Party Funding Bill“) and the Arbitration (Amendment) Bill 2016

Somewhere beyond the seen: Paris Court of Appeal sets aside an award on the basis of serious indications of money laundering after considering new evidence and reevaluating the record.

Abstract: On 21 February 2017, the Paris Court of Appeal set aside an UNCITRAL award on international public policy grounds due to serious indications of money laundering. Allegations of corruption and criminal activity have been used increasingly in recent years in French courts to argue for the setting aside of arbitral awards on the grounds of a breach of international public policy. This is the first time, however, that the Paris Court of Appeal has set aside an award on the basis of alleged money laundering. Further, this decision appears

More pro-arbitration measures in China for foreign investors

The PRC Supreme People’s Court recently announced changes promoting arbitration between companies incorporated in pilot free trade zones: wholly foreign owned enterprises incorporated in pilot free trade zones can now submit commercial disputes to foreign arbitration; and there is a possibility that China is opening the door to ad hoc arbitration. These changes, issued on 30 December 2016 in the Opinions on Provision of Judicial Safeguards to the Development of Pilot Free Trade Zones (Fa Fa [2016] No. 34) (“Opinions“), are major pro-arbitration changes to promote business in China’s free

The New VIAC Rules – Effective from 1 March 2017

On 1 March 2017, the new arbitration rules of the Vietnam International Arbitration Centre (VIAC) came into force, replacing the 2012 rules. The 2017 VIAC Rules include the following changes: Multiple Contracts (Article 6) – under the 2017 VIAC Rules parties will now have the opportunity to bring claims relating to more than one contract in a single Request for Arbitration, irrespective of whether the claims are made under one or more arbitration agreement. Consolidation (Article 15) – parties may now agree to consolidate two or more pending VIAC arbitrations

Effective Today: Revised ICC Rules of Arbitration

The revised ICC Rules of Arbitration are in effect as of today, 1 March 2017.  The Rules were revised to increase efficiency and accountability in ICC arbitrations and, most significantly, the revised Rules provide for a new expedited procedure that brings the ICC into line with fast-track procedures already available in a number of other arbitral institutions around the world. Unless parties opt out, the ICC’s new Expedited Procedure Rules will automatically apply to all arbitrations with arbitration agreements concluded after 1 March 2017 and with amounts in dispute up