The Republic of Sierra Leone v SL Mining Ltd
| Jurisdiction | England & Wales |
| Judge | Sir Michael Burton GBE |
| Judgment Date | 15 February 2021 |
| Neutral Citation | [2021] EWHC 286 (Comm) |
| Date | 15 February 2021 |
| Docket Number | Case No: CL-2020-000185 |
| Court | Queen's Bench Division (Commercial Court) |
In the Matter of an Arbitration with ICC
[2021] EWHC 286 (Comm)
Sir Michael Burton GBE
SITTING AS JUDGE OF THE HIGH COURT
Case No: CL-2020-000185
Case No. 24708/TO
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Charlie Lightfoot (instructed by Jenner & Block (London) LLP) for the Claimant
Ali Malek QC, Tom Sprange QC and Kabir Bhalla (instructed by King and Spalding International LLP) for the Defendant
Hearing dates: 2 February 2021
Approved Judgment
This has been the hearing of a challenge under s 67 of the Arbitration Act 1996 (the 1996 Act) by the Claimant, the Republic of Sierra Leone, to the Partial Final Award on Jurisdiction dated 6 March 2020 by Arbitrators, Professor Fabian Gelinas, Justice Sanji Monageng and Dr Michael Pryles AQ PBM, in an underlying ICC Arbitration between it as respondent and the Defendant, SL Mining Ltd as claimant.
By the Award the Arbitrators concluded that they had jurisdiction in respect of the Defendant's claims in the Arbitration concerning the suspension and subsequent cancellation by the Claimant of a large-scale mining licence granted to the Defendant on 29 March 2017, and a licence agreement dated 6 December 2017, for a period of 25 years. The Claimant has been represented before me by Charlie Lightfoot of Jenner & Block (London) LLP and the Defendant by Ali Malek QC, and Tom Sprange QC and Kabir Bhalla of King and Spalding International LLP.
The clause of the MLA in question in the Award was clause 6.9 (c). Clause 6.9 reads as follows:
“6.9 Interpretation and Arbitration
a) Except as may be otherwise herein expressly provided, this Agreement shall be construed, and the rights of [the Claimant and the Defendant] hereunder shall be determined, according to the Laws of Sierra Leone.
b) The parties shall in good faith endeavour to reach an amicable settlement of all differences of opinion or disputes which may arise between them in respect to the execution performance and interpretation or termination of this Agreement, and in respect of the rights and obligations of the parties deriving therefrom.
c) In the event that the parties shall be unable to reach an amicable settlement within a period of 3 (three) months from a written notice by one party to the other specifying the nature of the dispute and seeking an amicable settlement, either party may submit the matter to the exclusive jurisdiction of a Board of 3 (three) Arbitrators who shall be appointed to carry out their mission in accordance with the International Rules of Conciliation and Arbitration of the… ICC. ……
d) In the event of any notified dispute hereunder, both parties agree to continue to perform their respective obligations hereunder until the dispute has been resolved in the manner described above.”
The relevant Notice of Dispute was served by the Defendant on 14 July 2019. The Request for Arbitration (RFA) was served on 30 August 2019. The Claimant's challenge, rejected by the Arbitrators, after written submissions and a hearing on 10 January 2020, was that no arbitration proceedings could be commenced before 14 October 2019 (three months from the Notice of Dispute) and so the Arbitrators were without jurisdiction. There was a subsidiary argument that the Emergency Arbitrator procedure, invoked by the Defendant pursuant to Appendix 5 of the Emergency Arbitrator Rules (incorporated by clause 6.9 l(c)), on 20 August 2019, in the light of the steps being taken by the Claimant, was also invalid.
I can deal shortly with this subsidiary argument, which was hardly run before me. I am entirely satisfied that by the provisions under clause 6.9 (c), incorporating the ICC Rules, the Claimant consented to the adoption of the Emergency Arbitrator procedure, and that the availability of such a procedure was thus provided for, just as would have been an application for interim relief in court prior to issue of a writ, in order to preserve the parties' respective positions pending the resolution of the dispute. This is made clear in paragraph 117 of the Award, which cross-referred to paragraph 36 of the Interim Order of the Emergency Arbitrator, dated 30 August 2019:
“Article 6.9 (c)) of the Agreement is directed to the amicable settlement of the substance of any dispute, whereas an Emergency Application is directed to the preservation of the rights of a party pending an amicable settlement of the dispute or its adjudication by an arbitral tribunal.”
It was all the more relevant because of the provisions of clause 6.9 (d) of the MLA quoted in paragraph 3 above. As the Award (and the Interim Order) made clear, there was no conflict between clause 6.9 (c) and the appointment of an Emergency Arbitrator, if otherwise appropriate, and applying for and obtaining interim relief from the Emergency Arbitrator did not constitute a breach of any condition precedent in clause 6.9, which was relevant only to the commencement of the substantive arbitration by the RFA.
As to the substantive arbitration, commenced on 30 August 2019, some 6 weeks before the expiry of 3 months from the Notice of Dispute, there were the following issues between the parties in respect of the challenge to the Arbitrators' decision that there was no non-compliance with clause 6.9 (c):
i) Is the challenge to the alleged prematurity of the RFA one to jurisdiction of the Arbitrators and thus within s 67 of the Act? (the jurisdiction/admissibility issue)
ii) If necessary, was there consent by the Claimant to the issue of the RFA and or waiver of the condition precedent? (the consent/waiver issue)
iii) If necessary, what is the proper construction of clause 6.9 (c)? and
iv) Upon the proper construction of clause 6.9 (c), was there breach/non-compliance with it by virtue of the Defendant's issue of the RFA on 30 August?
The Award contains some discussion as to the law to apply, but it was common ground before me that I should apply Sierra Leone law, which for all purposes was agreed to be the same as the law which would be applied at English law in this Court, which the parties and I have consequently applied.
Jurisdiction/admissibility
It was common ground before me that there is a distinction (seemingly first drawn out judicially in an English court by Butcher J in Obrascon Huarte Lain S.A. v Qatar Foundation for Education [2020] EWHC 1643 (Comm), PAO Tatneft v Ukraine [2018] 1 WLR 5947 and Republic of Korea v Dayanni [2020] 2 AER (Comm) 672 between a challenge that a claim was not admissible before Arbitrators (admissibility) and a challenge that the Arbitrators had no jurisdiction to hear a claim (jurisdiction). Only the latter challenge is available to a party under s 67, and interference by a court is thus limited and discouraged by s 1(c) of the 1996 Act, just as arbitration, if the choice of the parties, is encouraged (as for example by Lord Hoffmann in Fiona Trust v Privalov [2007] 1 AER 951 at [10]). The issue here was alleged prematurity. The claim, otherwise arbitrable, allegedly should not have been brought for another six weeks. To stay or adjourn the proceedings for six weeks (to allow for further time for negotiations to elapse), a course taken in similar circumstances in the courts (in non-arbitration cases, such as Cable & Wireless PLC v IBM (UK) [2002] 2 AER (Comm) 1041 and Dallah Real Estate and Tourism Holding Co v Pakistan [2011] 1 AC 763), would not be an answer for the Claimant, because if there were no jurisdiction, there would be no jurisdiction to stay or adjourn: a claim should simply be rejected as outside the jurisdiction of the arbitrators (pro tem). The Arbitrators concluded in the Award that it was a matter of admissibility and ruled that it was admissible. The distinction between admissibility and jurisdiction is, as will be seen, a considerable topic for academic discussion.
It is common ground that the starting point at English law is s 30 of the 1996 Act. S 67 permits an application to the Court to challenge any Award as to its “ substantive jurisdiction”, and this is defined by s 82 (1) of the Act:
““Substantive jurisdiction”, in relation to an arbitral tribunal, refers to the matters specified in section 30 (1) (a) to (c), and references to the tribunal exceeding its substantive jurisdiction shall be construed accordingly.”
S 30 (1) provides as follows:
“Unless otherwise agreed by the parties, the arbitral tribunal may rule on its own substantive jurisdiction, that is, as to –
(a) whether there is a valid arbitration agreement,
(b) whether the tribunal is properly constituted, and
(c) what matters have been submitted to arbitration in accordance with the arbitration agreement.”
Mr Lightfoot did submit that his challenge falls within s 30 (1) (a), on the basis of a contention that valid includes enforceable, but this was not developed, and it seemed obviously unarguable. However his real case was that his challenge fell under (c). He accepts that, as he put it, (a) and (b) pose binary questions, and (c) does not, so that the question is not whether (or not) a matter has been submitted to arbitration, but on its face addresses identification of the matters submitted. However, he submits that the wording allows for an argument that no matters have been “ submitted to arbitration in accordance with the arbitration agreement”.
The applicability of s...
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