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Category Archives: Legal Developments and Cases

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The DIFC Courts – a “conduit jurisdiction” no more?

As we predicted in our Annual Seminar on Recent Developments in the UAE Dispute Resolution Landscape, back in November 2016, the use of the DIFC Courts as a “conduit jurisdiction” has been called into question. There has been much discussion in the Dubai legal community and beyond about the use of the DIFC Courts as a conduit jurisdiction for the recognition and enforcement of both foreign and domestic arbitral awards following the line of decisions in Banyan Tree v Meydan Group LLC, DNB Bank ASA v Gulf Eyadah, and the

The Hong Kong Court of First Instance Narrowly Construes the Arbitration Ordinance in Relation to Domestic Arbitrations and the Application of Schedule 2

In A v D [2016] CFI 1014/216 the Honourable Mimmie Chan J dismissed as “totally without merit” proceedings to set aside the decision of an arbitral tribunal and counterclaim on the alleged grounds of serious irregularity under section 4 of Schedule 2 of the Arbitration Ordinance, Cap. 609 (“the 2011 Ordinance“), imposing significant cost sanctions on the applicants. Background The Claimants and the Respondent were equity partners of a firm pursuant to terms set out in a letter dated 11 May 2007 (the “Agreement“). In accordance with the Agreement the

Consistency restored as Astro v Lippo appeal dismissed

In the latest instalment of the long-running dispute between Astro and Lippo, the Hong Kong Court of Appeal (CA) has dismissed Lippo’s appeal against a 2015 first instance decision allowing the enforcement of five arbitral awards, despite a ruling of the Singaporean courts refusing enforcement on the basis that the arbitral tribunal had acted outside its jurisdiction in making the awards. Although it upheld the first instance decision, the CA notably disagreed with the High Court’s finding that Lippo did not act in good faith and reflected this in its

Hong Kong Court Shows Zero Tolerance for Unmeritorious Applications to Set Aside Arbitral Awards

In Arjowiggins HKK2 Limited v X Co [2016] HCCT 53/2015, the Honourable Madame Justice Mimmie Chan of the Hong Kong Court of First Instance gave short shrift to an application for setting aside an HKIAC award on technical and procedural grounds that she “dismissed as totally without merit.” Background Arjowiggins HKK2 Co Ltd (the “Claimant”) entered into a joint venture agreement in October 2005 (the “JV Agreement“) with X Co (the “Respondent”) to set up a company for the purpose of manufacturing paper products in China (the “Company”).  Under the

CETA paves the way for Investment Court System

After seven years of negotiations, the European Union (EU) and Canada signed the Comprehensive Economic and Trade Agreement (CETA) on 30 October 2016. One innovative yet controversial aspect of CETA is the establishment of an international court to resolve investor-State disputes under the Agreement. As a result of demands by Belgium’s regional Walloon government, which previously threatened to block the Agreement, the introduction of this court has been deferred until the Court of Justice of the EU determines its compatibility with EU law.  Nevertheless, CETA marks the first time that

French Conseil d’Etat outlines its power to set aside an international arbitration award

On 9 November 2016, the French supreme administrative court (Conseil d’Etat) affirmed its power to review international arbitration awards arising from certain public law contracts, while the review of arbitral awards traditionally falls within the jurisdiction of Civil courts. In this decision, the Conseil d’Etat partially set aside an ICC award arising out of a public law contract, rendered in a Paris-seated arbitration, on the basis that it had violated a mandatory rule of administrative law. At the same time, however, the Conseil d’Etat proceeded to limit the scope of

What the International Arbitration Bill, 2016 will mean for arbitrations in South Africa

During the next few months, the International Arbitration Bill, 2016 will be presented to the South African National Assembly. The Bill, once enacted, is set to place South Africa on the main international arbitration stage by aligning the administration of arbitrations in South Africa to the Model Law of the United Nations Commission on International Trade Law (UNCITRAL). Previously, arbitrations were subject to the Arbitration Act (Act No. 42 of 1965), unless otherwise agreed. In terms of the Bill, any international commercial dispute which the parties have agreed to submit

Heads up for 23 October 2016 – the new 12 month time limit for Indian seated arbitration

In October 2015 India’s arbitration law underwent major changes with the enactment of the Arbitration and Conciliation (Amendment) Act 2015 (“Amendment Act“).  One of the most controversial provisions in the Amendment Act was the introduction of a 12 month time limit within which an arbitral award must be rendered (section 29A). The Amendment Act According to section 29A all arbitrations seated in India commenced after 23 October 2015 are required to have a final award issued within 12 months of the appointment of the tribunal. For parties who have commenced

Macanese Investor Succeeds in Reversing Singapore High Court’s Decision on Jurisdiction in its BIT Claim

A Macanese investor, Sanum Investments Ltd (“Sanum“), has successfully appealed a Singapore High Court decision on a tribunal’s jurisdiction to determine Sanum’s claims under the bilateral investment treaty (“BIT“) between the People’s Republic of China (“China“) and the Lao People’s Democratic Republic (“Laos“). The Court of Appeal’s decision in Sanum Investments Ltd v Government of the Lao People’s Democratic Republic [2016] SGCA 57, which was handed down on 29 September 2016, is discussed below. Background While Macau was under Portuguese rule, the China-Portugal Joint Declaration (“Declaration“) was signed in 1987,

English High Court Indicates New LCIA Rules Limit Court’s Power To Grant Interim Relief

Gerald Metals SA V The Trustees of the Timis Trust & others [2016] EWHC 2327 Summary In an important recent decision on the intersection between emergency arbitrator provisions and applications to court for interim relief, the English High Court held that it was only entitled to provide interim relief to a party to an arbitration agreement where either an emergency arbitrator or an expeditiously formed tribunal were unable to provide the requested relief.  The court also held that there was no substantive distinction between the various tests for interim relief

One Step Forward, Two Steps Back – PRC Court refuses to enforce an ICC award on the ground of public policy

In Wicor Holding A.G. v. Taizhou Haopu Investments Limited (Civil Action (2015) Tai Zhong Shang Zhong Shen Zi No. 00004), the Taizhou Intermediate People’s Court refused to enforce an ICC award on the ground of public policy. Facts Taizhou Haopu Investment Limited (“Haopu“) entered into a joint venture agreement (“JVA“) with Wicor Holding A.G. (“Wicor“) in 1997, establishing a joint venture company (“JV“).  The parties agreed in the JVA to have their disputes arbitrated “in accordance with ICC mediation and arbitration rules“.  The JVA also provided that “if one party

Hong Kong courts are to have due regard to decisions affecting an arbitral award rendered by a court at the seat of arbitration

In Dana Shipping and Trading SA v Sino Channel Asia Ltd (HCCT47/2015), the Honourable Madam Justice Mimmie Chan of the Hong Kong Court of First Instance (“CFI“), in the latest decision in this case, declined enforcement of an arbitral award that had been set aside at its seat in London. Background The enforcement proceedings concerned an arbitral award rendered in London-seated arbitral proceedings in favour of the Applicant (“the Award“). On 16 November 2015, the CFI granted an order to enforce the award (“the Enforcement Order“). On 27 November 2015,

Hong Kong Court requires substantial security to stay enforcement of an arbitral award

In L v B (HCCT41/2015), the Honourable Madam Justice Mimmie Chan of the Hong Kong Court of First Instance (“CFI“) adjourned enforcement of an arbitral award for four months on the condition that a substantial security of HK$41.6 million including unpaid award and costs to be furnished by the losing party in the arbitral proceedings. Background The Applicant commenced arbitral proceedings against the Respondent for breach of a Non-Recourse Loan Agreement (“the Agreement”).  Under the Agreement, the Respondent agreed to advance a loan to the Applicant against the transfer of

The principle of non-intervention in arbitral proceedings does not displace a court’s inherent jurisdiction to grant injunctions

In Sonera Holding B.V. v. Cukurova Holding A.S. BVIHCMAP2015/0005, the Eastern Caribbean Court of Appeal (“CA“) granted an injunction restraining Cukurova Holding A.S. (“CH“), the respondent, from pursuing arbitral proceedings which could have undermined the enforcement of an earlier arbitral award.  The judgment provides a detailed analysis of the courts’ power to grant anti-arbitration injunctions following the enactment of the BVI Arbitration Act in 2013 (“Arbitration Act“). Facts In 2005, Sonera Holding B.V. (“Sonera“) entered into a letter agreement (“Letter Agreement“) with CH to buy shares owned by CH.  The

Singapore High Court sets aside arbitral award for breach of natural justice

In a recent decision in JVL Agro Industries v Agritrade International Pte Ltd [2016] SGHC 126, the Singapore High Court has set aside an arbitral award for the Tribunal’s failure to grant the plaintiff a fair hearing. The defendant is now appealing against the High Court’s decision. Background The parties entered into 29 contracts for sale of palm oil in 2008. When the market price collapsed they negotiated a price-averaging arrangement to permit deferment of delivery and average down the overall unit price. In 2010 the market price rose again

Brexit, Sanctions and the Rise of Asian Arbitral Seats – Much Ado about Nothing or Reshuffling the Cards?

The results of the UK’s referendum, with a vote to leave the European Union, will not affect London’s position as a leading international arbitration seat and dispute resolution centre.  The recent developments do not change the fact that the UK has been and will continue to be a favored destination for dispute resolution. London has long enjoyed its position as a highly respected and oft-used seat for international arbitration.  Recently, however, the EU-imposed sanctions and the rise of other seats, together with the perceived expense of conducting hearings in London

Hong Kong Courts urge parties to seek anti-suit injunctions promptly

In Sea Powerful II Special Maritime Enterprises (ENE) v. Bank of China Ltd (CACV36/2016), the Hong Kong Court of Appeal (“CA“) upheld the Court of First Instance’s (“CFI“) decision in refusing to grant an anti-suit injunction because the party seeking relief had not acted promptly, even though the objecting party suffered no prejudice from the delay. Facts The Plaintiff was a ship owner who entered into a contract of carriage with a charterer by a bill of lading (“B/L“).  It was expressly provided on the back of the B/L that

ICC names Singapore as fourth most preferred seat of arbitration in the world

The 2015 ICC statistics are in, and it’s looking better than ever for Singapore. In its latest report, the ICC has confirmed Singapore as the number one seat in Asia and the fourth most preferred seat globally for ICC arbitration. The 2015 ICC Dispute Resolution Statistics have revealed that, in 2015, over 6% of all new ICC cases named Singapore as the seat of arbitration, upholding its ranking as the number one seat of ICC Arbitration in Asia. Whilst the number of Singapore parties remained constant over the last 12

Hong Kong courts set aside an arbitral award for serious breach of due process

In China Property Development (Holdings) Ltd v Mandecly Ltd (CACV92/2015), the Hong Kong Court of Appeal (“CA“) affirmed the decision of the Court of First Instance (“CFI“) where an arbitral award was partially set aside due to a serious breach of due process. Facts The dispute arose out of a share purchase agreement between China Property Development (Holdings) Ltd (“CPD“) and the sellers (including Mandecly Ltd , Mr. Tsoi and Mr. Chan) (“Sellers“), where CPD would buy a PRC entity, BPP.  Due to the dispute, CPD and BPP commenced arbitration

The arbitrability of minority shareholder rights in Singapore

In Maniach Pte Ltd v L Capital Jones Ltd and another [2016] SGHC 6, the Singapore High Court recently handed down a decision concerning a dispute between the shareholders of the international gourmet food business Jones the Grocer. In response to the majority shareholder’s move to have the dispute settled through arbitration, the Court decided that seeking damages for minority shareholder oppression (under the Companies Act) is not arbitral, and that such action must be pursued through the courts. In reaching its decision, the Court cited Silica Investors Ltd v

Hong Kong court confirms the constitutionality of section 20(8) of the Arbitration Ordinance

In Wing Bo Building Construction Company Limited v. Discreet Limited (HCA 146/2015), the Hong Kong court confirmed that section 20(8) of the Arbitration Ordinance (“AO”), which provides that a decision of the court to refer the parties to arbitration is not appealable, was constitutional. The dispute arose out of a construction contract where the plaintiff was the main contractor and the defendant was the employer.  Court proceedings commenced by the plaintiff were stayed in favour of arbitration.  The plaintiff argued that section 20(8) of the AO was unconstitutional as it

SIAC signs an MOA with GIFTCL and further strengthens its Indian presence

On 3 June 2016, SIAC announced that it entered into a Memorandum of Agreement (“MOA“) with the Gujarat International Finance Tec-City Company Limited (“GIFTCL“) and GIFT SEZ Limited (“GIFT SEZ“). Under the MOA, SIAC will establish a representative office in the IFSC-GIFT, and SIAC, GIFTCL and GIFT SEZ will promote the use of arbitration, mediation and other dispute resolution mechanisms to resolve international commercial disputes in India’s International Financial Services Centre in Gujarat international Finance Tec-City (IFSC-GIFT). The Indian economy has seen an increasing number of commercial disputes in recent

Singapore Endorses Hague Convention on Choices of Court Agreements

On 2 June 2016, the Singapore Ministry of Law announced that Singapore has ratified the Hague Convention on Choice of Court Agreements (the “Convention”) in an aim to bolster Singapore’s position as a dispute resolution hub in Asia. The Convention will come into force in Singapore on 1 October 2016. Singapore’s Ministry of Law notes that “The Convention has two basic aims – first, to ensure that exclusive choice of court agreements in favour of courts of Contracting States are effectively enforced, and second, that judgments rendered by the chosen

SIAC announces newest edition of Arbitration Rules

On 27 May 2016, the Singapore International Arbitration Centre (“SIAC“) introduced the sixth edition of its Arbitration Rules (SIAC Rules 2016). Mr Gary Born, President of the SIAC Court of Arbitration, commented that the new rules “…contain many innovative features aimed at ensuring that SIAC stays at the cutting edge of international arbitration practice around the world.” The SIAC Rules 2016 come into effect on 1 June 2016. WHAT ARE THE CHANGES? Multiple Contracts and Consolidation (Rule 6 and Rule 8) – A streamlined process for disputes arising out of