Egf v Hvf
| Jurisdiction | England & Wales |
| Judge | Mr Justice Andrew Baker |
| Judgment Date | 16 September 2022 |
| Neutral Citation | [2022] EWHC 2470 (Comm) |
| Docket Number | Case No: CL-2022-000065 |
| Court | Queen's Bench Division (Commercial Court) |
[2022] EWHC 2470 (Comm)
Mr Justice Andrew Baker
Case No: CL-2022-000065
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
KING'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Paul Downes KC and Gaurav Sharma (instructed by LXL LLP) for the Claimant
Stephen Houseman KC (instructed by Allen & Overy LLP) for the First and Second Defendants
Tom Sprange KC and Kabir Bhalla (instructed by King & Spalding International LLP) for the Third to Fifth Defendants
Hearing dates: 15, 16 September 2022
(Approved Transcript)
Friday, 16 September 2022
( 14:08 pm)
Judgment by Mr Justice Andrew Baker
Introduction
This Claim concerns an arbitration seated in London in which what was then intended to be a single final hearing on the merits took place over four days in September 2021, “the September Hearing”.
The claimant company is the respondent in the arbitration and I shall refer to it as “the claimant”. The first and second defendant companies are the claimants in the arbitration and I shall refer to them as “the defendants”. The third to fifth defendants are the arbitrators and I shall refer to them as such. In the arbitration, the third defendant was appointed to chair the tribunal and I shall on occasion refer to the third defendant as “the chair”.
References to “the Act” will all be to the Arbitration Act 1996.
There will now be a further merits hearing in the arbitration, presently fixed with the arbitrators for up to eight days in December 2022. Accordingly, not only are the merits of the parties' substantive claims or defences not a matter for this court, but also, they have not yet been finally argued and determined in the arbitration. Therefore, I shall aim to be especially circumspect in anything I say that might be capable of being thought to express or imply a view, even very provisional, about any prospective argument on the merits.
I note, though, that on one aspect I shall set out an analysis of how a particular disputed issue of fact might in point of logic have the capacity to bear upon the merits. That cannot be avoided given the nature of a claim the claimant has advanced under section 24 of the Act.
I am giving this judgment in public because a claim the claimant has advanced under section 67 of the Act, alternatively section 68(2)(b), raises what may be an important point on the extent of the arbitrators' powers as regards interim remedies, albeit as will be seen it will not be necessary finally to resolve the point.
I have ordered anonymity in the listing of this hearing and in respect of this judgment, including as regards any reporting, to protect the confidentiality of the arbitration. In saying what I need to say about the arbitration and the issues arising in it, I shall describe things in ways that aim to preserve that anonymity.
The December Ruling and the Partial Award
The further merits hearing now fixed in the arbitration arises from a one-page written ruling dated 21 December 2021, “the December Ruling”, sent to the parties by the chair following a hearing before the arbitrators the previous day.
By the December Ruling, the chair on behalf of the arbitrators ordered that:
(i) a second arbitration that had been commenced by the claimant against the defendants following the September Hearing was to be consolidated with the arbitration with which I am concerned such that — and this was made explicit — the claims advanced in the second arbitration would be heard and decided by the arbitrators. The second arbitration may strictly have comprised more than one reference, but nothing turns on that and I shall use the singular;
(ii) the claims intimated by the claimant in the second arbitration were to proceed in the consolidated proceedings before the arbitrators, to the extent the claimant wished to pursue them, without the need for any further permission from the arbitrators;
(iii) the arbitrators would make timetabling directions to accommodate the consolidation if such directions were not agreed between the parties by 7 January 2022;
(iv) the claimant was to pay the first defendant US$250 million by 31 January 2022 by way of “Interim Payment Order”;
(v) costs were reserved, the arbitrators would give reasons for the December Ruling as soon as possible in 2022, and there was liberty to apply.
The December Ruling set out the relief the arbitrators had decided to grant upon a written “Application for Urgent Post-Hearing Relief” dated 12 October 2021, “the Application”. The Application was made by the defendants to the arbitrators in response to the commencement by the claimant of the second arbitration.
The first main part of the Application concerned what should be done about the second arbitration. The consolidation order was the relief granted as to that. It may deserve a word of further explanation. Underlying the arbitration are three separate but related commercial agreements all containing arbitration clauses. One of those includes a term to the effect that where more than one arbitration comes to be commenced, any of the appointed arbitration tribunals will have power to order consolidation. The arbitration with which I am concerned is itself a consolidation of what were originally three arbitrations, one under each arbitration clause, in all of which the arbitrators had been appointed as the tribunal. The second arbitration commenced by the claimant got no further than the appointment of an arbitrator by the claimant and the service on the defendants of notice of arbitration. That arbitrator has been stood down by the claimant, since it respects the consolidation order in the December Ruling.
The second main part of the Application was a submission by the defendants that come what may, at least about US$300 million would be found to be due from the claimant to the first defendant as of 30 September 2021. The Application gave a more precise figure with a supporting calculation, but that detail does not matter for my purposes.
The amount claimed was dubbed by the defendants the “Undisputed Debt” and the arbitrators were asked to grant, as it was put in the Application, “a Partial Award for the Undisputed Debt”. In a written reply submission in the Application, the defendants added in the alternative a claim for relief by way of: “… an interim order for the payment of the undisputed debt … [which] would grant the tribunal the power to revisit and modify any sums owing …” (original emphasis).
The defendants argued in that regard that the arbitrators had power “to make an interim order for payment as part of its power to order provisional relief pursuant to section 39 of the Act and Article 26 of the UNCITRAL Rules”. They said, and it was also their argument before me, that Article 26 and section 39 of the Act read together empowered the arbitrators “to grant on an interim basis any relief [they] would have power to order on a final basis”.
Against that background, it was tolerably clear that the interim payment order requiring the claimant to pay the first defendant US$250 million by 31 January 2022 was intended to be an interim remedy having the same effect in the arbitration as an order for interim payment under CPR 25. 1(1)(k) would have if the substantive proceedings were in this court.
That was confirmed beyond any possible doubt by a document dated 17 January 2022 provided to the parties by the arbitrators, “the Partial Award”. The Partial Award was signed at the end by all three arbitrators below a final section in the following terms:
“ DECISION
For the reasons set out above in elaboration of the December Ruling issued upon the conclusion of the hearing of the Application, the Tribunal hereby makes this Partial Award pursuant to Article 34 of the UNCITRAL RULES:
1. Arbitration A2 shall be consolidated with this present Arbitration.
2. By way of an Interim Payment Order, [the claimant] shall pay [the first defendant] the sum of US$250 million … by 31 January 2022.
3. The costs of the Application shall be costs in the Arbitration.”
Thus the Partial Award satisfied the formalities required by the Act for and purported to be an award. In my judgment – not, I think, that this was in dispute — the Partial Award is an award susceptible in principle of being challenged under section 67 or section 68 of the Act (or for that matter of being appealed under section 69 of the Act if the right of appeal were not excluded as in fact it has been in this case). The claimant says in one of its claims that the arbitrators should not have issued an award granting a merely interim remedy but that goes to the merits of that challenge to the Partial Award, it does not mean it is an incompetent challenge because there is no award to challenge.
The front page of the Partial Award gives it this title:
“ REASONS FOR DECEMBER RULING PARTIAL AWARD GRANTING AN INTERIM PAYMENT ORDER.”
Prior to concluding with the un-numbered “ DECISION” paragraph I have already quoted, the body of the Partial Award takes up 35 pages and comprises 89 numbered paragraphs under a series of headings. It is written much as a reserved judgment from this court might be written in respect of a heavy interlocutory application where the outcome has been pronounced at the end of the hearing and an order drawn up accordingly, but with written reasons to follow later.
The first section, an introduction, identifies the Application as the subject matter of the document, sets out the relief sought by the defendants as ultimately pursued on the Application, rehearses briefly the immediate procedural history culminating with the December Ruling, which is quoted in...
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English Commercial Court Holds That Arbitrators Are Not Empowered To Express Interim Relief In The Form Of An Award In UNCITRAL Arbitration
...September 2022, the English Commercial Court delivered its judgment in EGF v HVF, HWG, TOM, DCK, HRY [2022] EWHC 2470 (Comm) in respect of a London-seated arbitration under UNCITRAL Rules, dismissing a challenge to a partial award. The challenge was made partly under section 68 of the Engli......