First, in Sonact Group Limited v Premuda SPA, disputes arose under a charterpartywhich contained an arbitration clause. The disputes were subsequently settled, but the settlement agreement contained no jurisdiction provision. Males J held, nevertheless, that the arbitration clause in the charterparty covered claims under the settlement agreement.

In so finding, the court held that the wording of the arbitration clause in the charterparty (“any and all differences and disputes of whatsoever nature”) was wide enough to encompass a claim under the settlement agreement (at paragraph 15), and that it was “inconceivable” that the parties had intended that the owner would be unable to pursue a claim under the settlement agreement in arbitration and would have to commence court proceedings (at paragraph 16-17). Males J added that there was “no bright line rule” that once parties enter into a new legal relationship, “an arbitration clause in the underlying contract necessarily can no longer apply” (at paragraph 20).

Second, in State A v Party B, the court considered an application for an extension of time for the bringing of a section 67 challenge. The threshold requirements identified in order for an extension to be granted reflect the reluctance of the English courts to intervene in arbitral jurisdiction.

The court (per Sir Michael Burton), in applying the tests for an extension of time laid down by Colman J in Kalmneft v Glencore International AG and approved by the Court of Appeal in Nagusina Naviera v Allied Maritime Inc, determined that where delay in making the section 67 challenge (and applying for the extension to do so) is lengthy but the application for an extension is based on fresh evidence, an extension will nevertheless only be justified where the fresh evidence is “transformational” or “seismic“ or “a game-changer” (at paragraphs 53-54 and 56). In that case, where the delay was a “colossal” 959 days from the last date for a section 67 challenge (but where the fresh evidence would not have changed the approach of the tribunal), an extension was refused.

Third, in Filatona Trading Ltd and another v Navigator Equities Ltd and others, it was held that an unnamed but disclosed principal of a party to a shareholders’ agreement (SHA) could sue under an arbitration agreement. The SHA named A and B as parties and provided for all disputes to be referred to arbitration. C (not a named party to the SHA) commenced arbitration proceedings against B, claiming that he (that is, C) was the disclosed principal of A (who was his nominee or agent) and, as such, the true party to the SHA and entitled to claim via the arbitration agreement.

Applying Aspen Underwriting Ltd and others v Credit Europe Bank NV and Kaefer Aislamientos de CV v AMS Drilling Mexico SA de CV, Teare J held that an undisclosed principal can sue and be sued on a contract provided that:

• The terms of the written contract did not confine it to the named parties.
• At the time of the relevant contract, the agent intended to contract on the principal’s behalf.
• Entering into the contract was within the actual authority of the agent.

He held that the second and third points were satisfied on the evidence. As to the first, he held that the terms of the SHA (which did not unequivocally and exhaustively identify the contracting parties, despite an entire agreement clause) did not preclude the intervention of a disclosed principal: “very clear words” were required to show that only the named party, rather than its principal, was intended to have the right to perform the contract.

Thus, these decisions confirm that (as stated in the DAC Report at paragraph 22) “the Courts nowadays generally only intervene in order to support rather than displace the arbitral process”, and continue a trend of only reluctant intervention by the courts into arbitral jurisdiction.

Nevil Phillips

A significant proportion of Nevil’s practice involves high-value (unreported) International Arbitration work, especially in the Energy and Shipbuilding fields. Recent examples include a dispute regarding disclosure of commission rights between a business and finance development agent in the Middle East and the US commercial entity seeking finance and venture capital investment with regard to eventual IPO; as leading counsel in a USD 20 million dispute regarding the construction of a very high profile Offshore Support/Emergency Towing Vessel; as leading counsel in USD35 million multi-vessel shipbuilding dispute; as counsel for a shipyard in a USD35 million shipbuilding dispute involving issues of unlawful conduct; as counsel for the buyer in a complex USD 25 million technical dispute concerning shipment and supply of fuel and source material for an Imperial Smelting Plant; and as counsel in a multi-million Euro joint venture dispute between international ferry operators.

Much of Nevil’s practice involves him leading a team, very often against Silks.  He is especially well-regarded for his skills as a subtle cross-examiner, especially of experts.

“A top QC without the badge – a terrier and the ideal add-on to any winning team.” (Legal 500 Asia-Pacific, 2019)

“Very hands-on. A complete team player. ... Engaging and user-friendly. ... Fabulously clever. He can be relied on to get to grips with difficult issues.” (Chambers UK, 2019)

“...Has an encyclopaedic knowledge of the law, combined with an extremely high standard of advocacy and commercial understanding...” (Legal 500, 2019)

> To view Nevil Phillips full website profile, please click here

nevil.phillips@quadrantchambers.com

In Mexico Infrastructure Finance LLC v The Corporation of Hamilton, the Privy Council held, 3-2, that the grant by the Corporation of Hamilton of a guarantee to support borrowing by a private developer was ultra vires and, accordingly, unenforceable. The case concerned the construction of the term “municipal purposes” in the relevant legislation.

The majority adopted a narrow construction, holding that the term was limited to activities by which residents were provided with a direct benefit. The dissenters adopted a broader construction, holding that the term included any action taken for the direct or indirect benefit of residents.

Background

In 2012, the Corporation of Hamilton entered into an agreement with a private developer, PLV, for the construction of a five-star hotel complex. It was intended that the hotel would boost tourism in Hamilton and would provide enhanced revenues for associated service providers in the area. The Corporation would also receive rental income from the hotel operator and income from the use of a car park built as part of the complex.

PLV obtained a bridging loan of $18m from Mexico Infrastructure Finance LLC (MIF) in connection with the development. The Corporation provided MIF with a guarantee in respect of that loan, purportedly pursuant to a power under s 23(1)(f) of the Municipalities Act 1923 of Bermuda (1923 Act). When PLV defaulted, the lender called on the guarantee. The Corporation refused payment, arguing that the guarantee was ultra vires and unenforceable. This defence was allowed at first instance and in the Court of Appeal for Bermuda.

The Power

There was no express power to issue guarantees in the legislation by which the Corporation was created: if there was any such power, it had to be implied from other provisions. Section 23(1) of the 1923 Act gave the Corporation the power to levy rates for specific purposes, one of which (set out in sub-s (f)), was, “such municipal purposes, being purposes of an extraordinary nature, as the Minister may in any particular case approve”.

First Instance

At first instance, Hellman J held that the issuing of the guarantee by the Corporation to MIF did not fall within the scope of the purpose set out in s 23(1)(f) of the 1923 Act because it was not a service provided by the Corporation to its ratepayers, even though it may have been of benefit to them. Accordingly, the guarantee was ultra vires.

Court of Appeal

The Court of Appeal for Bermuda agreed with Hellman J’s decision. It held that a development carried out by the Corporation which was of benefit to the entirety of Bermuda would be ultra vires as it would not relate to the functions of the local government of the city of Hamilton.

Privy Council 

Argument

In the appeal before the Privy Council, MIF argued that the phrase “municipal purposes, being purposes of an extraordinary nature” must be given a broad construction.

It submitted that:

James M Turner QC

James M. Turner QC is a highly regarded and well-known Commercial Advocate. He was called to the Bar in 1990 and appointed Queens Counsel in 2013.

His practice encompasses commercial contractual disputes across sectors including International & Commercial Arbitration, Energy, Shipbuilding, Offshore Construction, Shipping and Banking.

He appears in the Commercial Court and the Appellate Courts (Court of Appeal and Supreme Court) and has extensive experience of Arbitration, appearing before domestic and international arbitral bodies (such as HKIAC, LCIA, ICC and LMAA) as well as in ad hoc matters.

Many of his cases require the co-ordination of a range of expert specialisms, ideally suited to James’s down to earth approach, team-building skills and highly-regarded technical knowledge. Reflecting the invariably international character of his practice, James has extensive experience in dealing with foreign law and multi-jurisdictional disputes. He has a particular eye for appreciating and addressing cultural barriers in international arbitration.

James has given written expert evidence of English law in the Courts of Italy, France, Spain, the Netherlands, Ireland, Belgium and Austria.

James has considerable experience of applications for injunctive relief (freezers, delivery up, restraining orders and anti-suit injunctions), as well as receivership and interpleader.

He is regularly appointed arbitrator, particularly in shipping disputes, and has extensive experience of mediation, both as mediator and as counsel.

James has a First Class Master's Degree in German Law and speaks and reads German and Dutch fluently. He accepts instructions in either language.  He also reads French.

> view James' profile

Robert-Jan Temmink QC

Robert is recognised as a talented advocate with a commercial practice encompassing a broad spectrum, from Chambers' core areas of aviation and shipping, to energy, construction, and insurance law together with financial services, insolvency and fraud. Many of Robert's cases involve cross-border, or other jurisdictional issues both in the UK and abroad and he most regularly appears in the Commercial, Chancery and Technology & Construction courts in the United Kingdom. He is also registered to practice at the Dubai International Financial Centre Court where he has frequently appeared and is called to the Bar in Northern Ireland and as a Foreign Legal Consultant in the State of New York. He is often asked to work on cases in the Caribbean (he is called to the bar of the Eastern Caribbean) arising out of contractual or commercial chancery disputes.

Robert is a Fellow of the Chartered Institute of Arbitrators and is one of the arbitrators at the Dubai International Arbitration Centre. He is also a panel arbitrator at the Kuala Lumpur International Arbitration Centre and the Hong Kong International Arbitration Centre.  He has appeared in a wide variety of arbitral proceedings under different institutions' rules, and as sole or a panel arbitrator in ICC and LCIA proceedings. Robert is an accredited commercial mediator in the UK and abroad and is a TECBAR-accredited adjudicator, arbitrator and mediator.

Robert is ranked as a leading barrister in the current editions of Chambers UK and The Legal 500. Areas include commercial dispute resolution, international arbitration and aviation.

> view Rob's profile

> Download Quadrant on Shipping

Contents:

• Extension of Fiona Trust to settlement agreement: The Four Island [2018] EWHC 3820 (Comm) - Ruth Hosking
• Government interferences under the Sugar Charter Party 1999: ‘The Muammer Yagci’ - Andrew Carruth
• The Pacific Voyager - When is an owner under a voyage charterparty obliged to commence the approach voyage to the loadport? - Stewart Buckingham
• Volcafe v CSAV [2018] UKSC 61: Who has to prove what, when? - Natalie Moore
• Unseaworthiness and Passage Planning: The CMA CGM LIBRA - Emmet Coldrick
• Collision Liability heads to the Supreme Court: Alexandra 1 v Ever Smart - Paul Henton 
• Force majeure and alternative modes of performance: Classic Maritime Inc v Limbungan Makmum SND BHD [2018] EWHC 2389 (Comm) - Paul Toms
• Set-off against freight: freight-forwarding and project cargoes - Emmet Coldrick 
• No requirement for cross-undertaking in damages: THE “MV ALKYON” - Andrew Leung
• Deck cargo exclusion clauses: Aprile SPA v Elin Maritime Ltd (“The Elin”) - Max Davidson
• The Athens Convention: Warner v Scapa Flow Charters [2018] UKSC 52; [2018] 1 WLR 4974 - Tom Bird
• Time Charter Disputes: Owners cannot claim hire for vessel detained by pirates – The Eleni P - Tom Nixon
• The “LADY M” – The Court of Appeal considers the meaning of the ‘fire’ exception - Benjamin Coffer

The first to speak was Sarah Roach, Senior Counsel at BP. Sarah’s topic was climate change litigation and the dual challenge of capping the global temperature rise whilst meeting the increasing global demand for energy. To put it another way, the challenge of generating more power whilst lowering emissions.

Climate change litigation is a growing area of the law, with most cases having occurred since 2015. Whilst the defendants are mostly States, companies are increasingly being brought into disputes. The most notable recent case is Urgenda Foundation v Kingdom of the Netherlands, which was a successful claim against the Netherlands for failing to mitigate the risks associated with climate change. There is a pipeline of cases pending in Europe which must be monitored to see whether other countries will follow the same approach as the court in Urgenda.

Elizabeth Sullivan, Senior Legal Counsel at Centrica Storage, spoke about the surge of new investment in the North Sea and the legal challenges it poses. The Oil & Gas Authority is trying to encourage new entrants to the market, but there is a legal impact of working with private equity. For example, whereas the contractual allocation of risk has previously often involved uncapped liabilities, private equity investors wish to cap their contractual liabilities.

Overall, the new investment in the North Sea presents both risks and opportunities. Private equity investors are providing investment at a time when other entities are exiting the basin. On the other hand, some parties will attempt to block private equity investors on the basis that they do not have the necessary financial and technical capability.

The third to speak was Sue Millar, Partner at Stephenson Harwood LLP. Sue’s topic was the changing sanctions regime at a time of global political turmoil. Sue focussed on the sanctions affecting Russia, Iran and Venezuela and how they have changed recently, for example since the commencement of the Trump Presidency.

In relation to Russia, the US and EU sanctions regimes were previously aligned, but that is no longer the case. The inventively titled Countering America’s Adversaries Through Sanctions Act provides for a substantial expansion of US sanctions, but is largely not yet in force. In relation to Iran, President Trump has announced that the US will withdraw from the Joint Comprehensive Plan of Action. The EU has responded with an amended EU Blocking Regulation, which has been implemented differently in different Member States. Finally, the US has been increasing its sanctions on Venezuela, but they do not appear to have extra-territorial effect. Thus, the sanctions tapestry continues to change.

Gemma Morgan of Quadrant Chambers spoke about the recent case of Seadrill Ghana Operations Limited v Tullow Ghana Limited [2018] EWHC 1640 (Comm), in which she appeared as junior counsel, and the risks associated with declaring a force majeure event. In particular, the case addresses the situation where there are concurrent causes of the inability to perform, some amounting to force majeure events and some not, as well as reasonable endeavours clauses.

The case establishes that a defence of force majeure is only likely to be available if the force majeure event is the sole cause of the inability to perform. As for reasonable endeavours clauses, whilst economic factors are not irrelevant, it will in general be difficult to establish that it was reasonable not to take steps which were available, albeit uneconomical.

Finally, Chris Smith QC, also of Quadrant Chambers, spoke about complying with contractual notification regimes. He explored the inconsistency in the existing authorities as to what will and will not amount to a condition precedent. For example, imperative language may or may not be sufficient. Similarly, identifying a fixed period of time for compliance may or may not be sufficient. Ultimately, the best advice which can be given is to use the exact words ‘condition precedent’ in the clause if that is the intended effect.

As a whole, the talks demonstrated that the oil and gas industry continues to face perennial challenges such as force majeure provisions and contractual notification regimes, but also faces a host of new challenges from such issues as climate change, private equity investment and changing sanctions regimes.

The seminar was filmed and the video can be viewed at https://www.quadrantchambers.com/seminars/energy2019

Simon Rainey QC

Simon Rainey QC is one of the best-known and most highly regarded practitioners at the Commercial Bar with a high reputation for his intellect and advocacy skills. He is regularly involved in high value complex energy disputes, for example: drilling and exploration projects, both in terms of construction and infrastructure issues and in relation to casualties due to failures of equipment or negligent operation involving the allocation of responsibility in complex factual and technical situations; offshore and onshore construction projects covering virtually every species of oil and gas platform, rig, FPSO, offshore vessel and wind farm; production, transportation and processing agreement matters; oilfield redetermination and boundary disputes; energy generation and energy trading etc.

Recent and current cases include: in the Commercial Court, DSME v Songa Offshore[2018] EWHC 538 (Comm); Transocean Drilling v Repsol Sinopec; Vitol E&P v New Age Energy ; Crestar Resources v Newton Energy; Teesside Gas Transportation v CATS North Sea and, in arbitration, Statoil v Chevron, Petrobras (and others) and Crescent Gas v National Iranian Oil Co. 

He is ranked by Chambers UK in Band 1 for Energy & Natural Resources (2018) and as the Star Individual for Shipping and Commodities in 2015, 2016, 2017 and 2018; Shipping Silk of the Year 2016 (by both Chambers UK and Legal 500) and was named in Lloyd’s List Top 10 Maritime Lawyers 2017 and again in 2018. He has long been ranked as a leading silk in both directories (UK and Asia) for Energy and also Commercial Litigation and International Arbitration, and was nominated Legal 500 International Arbitration Silk of the Year 2016-2017. Quotes include: "A strong leader in the energy field, with noted prowess in complex, high-profile oil work." "He has strong credentials in the oil trading field, combined with an agile mind, and is not afraid to push the boundaries of the law." "Exceptional for really complex energy cases, his particular skill lies in reducing the complicated to the elegantly simple." (Chambers & Partners UK Bar 2018);  ‘A first-choice QC for the very complicated cases’; ‘A senior silk with gravitas, who provides crystal-clear advice that gets to the bottom line.’ (Legal 500 2017).

He is also the author of the leading text on marine offshore contracts: "The Law of Tug and Tow and Offshore Contracts" (Informa, 4th Edn, 2018); co-author of "Offshore Contracts and Liabilities" (Informa, 2015: chapter on offshore project mutual indemnities) and co-author of "Offshore Structures: Law and Liability" (Sweet & Maxwell, publication 2019: chapters on LOGIC and IADC forms and the OGUK and AIPN JOA forms). He is a Deputy High Court Judge (Commercial Court and Queen’s Bench Division), sits as arbitrator and has performed numerous expert determinations, especially on North Sea matters.

To view Simon Rainey QC full website profile, please click here.

Sarah Roach, Senior Counsel, BP

Sarah is Senior Counsel in the small London based dispute resolution team at BP that manages significant disputes in the UK and rest of the world (other than the US).  Her experience ranges across international arbitration under all of the institutional rules and ad hoc arbitrations; litigation in various jurisdictions and mediations.  Before joining the in house team at BP in 2013, Sarah was Of Counsel in the litigation team of an international firm, based in London.

Elisabeth Sullivan, Senior Legal Counsel, Centrica

Experienced legal counsel, non-executive director, company secretary and lecturer. Experience of governance in FTSE 100, large privately owned and not-for-profit organisations. Broad international corporate and commercial experience spanning the UK, Europe and Asia Pacific. Specialist understanding in energy / natural resources.

Since 2018, senior legal counsel for Centrica plc, a FTSE 100 energy and services company, responsible for Centrica Storage Limited legal matters. From 2013 to 2017, company secretary and legal manager for Perenco UK Limited, the UK’s fourth largest oil & gas company. From 2005 to 2013, senior associate at Herbert Smith Freehills LLP, an international law firm. Worked in the energy, infrastructure and mining corporate group in its London and Tokyo offices, specialising in energy M&A.

Guest lecturer at the Energy Law Institute at the Queen Mary University in London and the Centre for Energy, Petroleum and Mineral Law and Policy at the University of Dundee. Non executive director at LOGIC, a not-for-profit governance body that promotes cross-industry offshore oil and gas projects in UK. Operator legal committee member, Oil and Gas UK. Committee member, Wadham College Law Society.

Sue Millar

Sue is an experienced and well-respected litigator whose expertise in commercial and banking litigation is recognised by Chambers UK. Clients value her responsiveness and her commitment to finding solutions to complex problems. She co-heads the firm's "technically strong" finance litigation team.

Sue is a finance litigation specialist. She focuses on investment banking disputes, involving highly complex products and structures. Her expertise extends to commercial and private banking and trade finance disputes.

She is also recognised for her expertise in commercial dispute resolution where her pragmatic approach wins praise. Clients describe her as knowing "the best deal and how to achieve it". She advises a diverse range of clients including insurance brokers, asset managers, corporate and pension trustees and insolvency professionals.

Sue also leads the firm's sanctions group. She advises on a range of contentious and non-contentious issues arising in relation to the various Iranian, Libyan, Syrian and Russian sanctions regimes. Her experience in this area extends to acting for designated entities and individuals in challenging their designations before the EU Courts.

Sue co-heads the firm's Iran group with Dubai managing partner, Rovine Chandrasekera.

Chris Smith QC

Chris has a broad practice encompassing all areas of commercial law, with a particular focus on energy, dry shipping, commodities, and insurance disputes. He has appeared extensively in the Commercial Court, representing clients at all stages of proceedings, from urgent pre-action interlocutory applications all the way through to trial. Chris also appears regularly in both domestic and international arbitrations, and has undertaken cases before tribunals in London, Zurich and Hong Kong. 

Chris has a substantial energy practice with a number of reported cases including Hashwani v OMV Maurice Energy Ltd [2015] EWHC 1811; and SC DG Petrol v Vitol SA and others [2014] EWHC 3900 (Comm), [2014] EWHC 3920 & 2176 (Comm) and is currently engaged in several heavy energy arbitrations due to be heard in 2019.

Chris is recommended as a leading barrister for energy and for shipping in the Legal 500 UK and Asia Pacific editions, the latest edition quoting “He is outstanding in his legal analysis and presentation of cases before tribunals. ‘He is often the equal of silks on the other side.” He is also recommended for shipping & commodities in Chambers & Partners UK and Global guides, with the latest edition quoting “He has a razor-sharp mind and is very thorough. He comes up with brilliant arguments and gets great results.” In 2015, Chris was nominated for Junior Shipping Barrister of the Year in the Chambers UK Bar Awards. Other comments have included: “a star of the future and is a fierce advocate”; “he is thoroughly commercial and has sound judgment as to what points to fight”; “...he is very quick, responsive and user-friendly...”; “...a particularly tenacious and effective advocate; exactly the man you want in tight situations...”; “...diligent and accessible...”; “... decent, efficient and business like ...”; “... practical and with good attention to detail ...”; “... has a natural style of advocacy that goes down well in the commercial court ...”; “.... an ability to absorb enormous amounts of information and advise on a case clearly and concisely ...”

To view Chris Smith full website profile, please click here.

Gemma Morgan

Gemma is a sought after junior in a range of commercial disputes particularly in the fields of shipping, commodities, energy/offshore and construction (shipbuilding). She provides an efficient and thorough service and combines accurate legal analysis and advice with practical commercial and tactical awareness.  She has extensive experience of heavy and technically-complex cases, in particular those in the shipping and energy sectors, and enjoys working well as part of a team.

She is frequently instructed in technically demanding, complex energy and offshore work, both as sole and junior counsel and has acted in major commercial disputes in the oil and gas sector. Gemma is regularly instructed to act for and to advise clients both in respect of technical disputes and in claims arising out of issues of contractual construction and recoverability of sums paid under terminated contracts. She has extensive experience of drafting detailed pleadings in complex cases as well as advising in relation to a full spectrum of legal and technical issues arising out of energy and offshore contracts.

Gemma was identified by Legal Week as one of its ten Stars at the Bar for 2016 in a profile piece on the most promising young barristers. Gemma received the following praise from clients:

·        "She can easily hold her own against QCs on paper and in hearings."

·       "razor sharp mind, ideally suited to complex commercial disputes".

·       “… retains a strong sense of commercial awareness, which, allied with a combination of intellect, enthusiasm, and emotional empathy, marks her out as someone special.”

·       "Her confident advocacy means she can win the ear of the judge even when pitted against far more senior opponents."

·       "… excellent at giving a clear tactical steer at the outset and recognising the broader commercial considerations."

Gemma is recommended by Chambers UK and the Legal 500 UK and Asia Pacific editions as a 'Leading Junior'.

To view Gemma Morgan full website profile, please click here.

“It has become almost commonplace these days for users of arbitration to be dissatisfied with the time and costs involved in arbitral proceedings.

One of the ways to increase the efficiency of arbitral proceedings is to encourage tribunals to take a more active role in managing the proceedings (as is traditionally done in may civil law countries).

With this in mind a Working Group was formed with representative from around 30, mainly civil law, countries…”

The Prague Rules project is a (rather mild) backlash by those steeped in the civilian, inquisitorial tradition against the perceived dominance of the common law, adversarial approach in international arbitration. In that sense, they are the civilian response to the IBA Rules on the Taking of Evidence in International Arbitration 2010 (IBA Rules).

Do the Prague Rules offer a real alternative to a process which owes perhaps too much, for 21st century tastes, to the 19th century jury trial? Will it empower tribunals to cut through the Anglo-Saxon tendency to drown the process in documentation? Or is it, as one commentator has observed, just so much tilting at windmills?

The nature of the problem

The inquisitorial versus adversarial debate suffers from inevitable resort to stereotype and the fact is that there are very few who are sufficiently well-versed in both to offer a fully informed disquisition on their respective merits. It is not as if, for example, active case management is anathema to the common law litigator: it is over 20 years since it was introduced into the mainstream English courts, and it had been around for several years before that in the Commercial Court. Indeed, the previous version of the IBA Rules were published at much the same time as the Civil Procedure Rulestook effect in England.

It also remains common, even now, for cases not to be handled as efficiently as in retrospect they might have been, so the problem is not that tribunals lack the tools required for efficient case management. Rather, the challenges to efficiency lie in time and understanding, and the hard edge of the requirement for a fair hearing. To unpack that a little: in many if not most cases, a case management hearing (or equivalent) is the tribunal’s first real opportunity to grapple with the issues in the case. If a case is a mountain, then the tribunal is at this point still in the wooded foothills. Even the parties’ lawyers may barely have broken through the tree line; added to that, the good arbitrator is also a busy arbitrator and so may lack the time needed to get even as well on top of the issues as the parties’ lawyers. It should be no surprise, then, if tribunals are reluctant to make full use of the range of powers at their disposal, not least because to do so when their understanding of the case is undercooked is to invite challenge.

The Prague Rules address none of these problems. They expressly require the tribunal to “ensure fair and equal treatment of the parties and provide them with a reasonable opportunity to present their respective cases”. Whatever their strengths and weaknesses, therefore, they offer no case management silver bullet.

So what, then, do they offer? And how, if at all, do they differ from the IBA Rules?

Prague v IBA

The single biggest difference between the Prague and IBA Rules is the permission in Article 9 of the former for the tribunal to assist the parties in reaching an amicable settlement. Indeed, if the parties consent, one of the tribunal may act as mediator and, again with the parties’ consent, continue to act as arbitrator even if the mediation fails. Such provisions usually cause Anglo-Saxon lawyers to choke, but they are common enough in, for example, Chinese arbitration and German litigation. The IBA Rules contain no equivalent provision. There may be much to be said for Article 9: if the attempt to settle or the mediation succeeds, then the additional cost of the mediation phase ought to be rather lower than a separate process.

Beyond the eye-catching Article 9, the principal differentiation between the two is one of emphasis. For example, Article 4 of the Prague Rules deals with documentary evidence in far fewer words and with fewer teeth than Article 3 of the IBA Rules, “encourag[ing]” the tribunal and the parties “to avoid any form of document production, including e-discovery”. This “encouragement” is a watering-down of an earlier draft which required tribunals to avoid any e-discovery. In a similar vein, Article 8 of the Prague Rules encourages the resolution of the disputes on documents alone, although, in effect, either party can insist on a hearing (Article 8.2). The IBA Rules, by contrast, assume that there will be an “Evidentiary Hearing”.

The Prague Rules also encourage the tribunal (Article 2.4), from the case management hearing onwards, to offer provisional views on various matters such as undisputed facts; burden of proof; and “its understanding of the legal grounds on which the parties base their positions”. That, too, is not so very different from the experience of any robust tribunal, or one driven by institutional rules to nail down the nature of the dispute at a similarly early stage.

Possibly the two sets of rules could be seen as complementary, but it may be asking too much of parties to pay for their synthesis in any one case. Until experience of them is more widespread, the better approach, for Anglo-Saxon lawyers at least, may be to agree the Prague Rules’ application only in relatively simple, standard or low value disputes. Despite the self-confidence of their full title, they break no new ground in terms of efficiency.

James M Turner QC

James M. Turner QC is a highly regarded and well-known Commercial Advocate. He was called to the Bar in 1990 and appointed Queens Counsel in 2013. 

His practice encompasses commercial contractual disputes across sectors including International & Commercial Arbitration, Energy, Shipbuilding, Off Shore Construction, Shipping and Banking.

In the UK he appears frequently in the Commercial Court and the Appellate Courts (Court of Appeal and Supreme Court) and has extensive experience of Arbitration, appearing before all the main domestic and international arbitral bodies (HKIAC, UNCITRAL, LCIA, ICC, LMAA) as well as in ad hoc matters.

Many of his cases require the co-ordination of a range of expert specialisms, ideally suited to James’s down to earth approach, team-building skills and highly-regarded technical knowledge. Reflecting the invariably international character of his practice, James has extensive experience in dealing with foreign law and multi-jurisdictional disputes. He has a particular eye for appreciating and addressing cultural barriers in international arbitration.

To view James' full profile, please click here.

james.turner@quadrantchambers.com

Introduction

This review covers the most important court decisions in England and Wales in the field of arbitration law in 2018, in particular as regards jurisdiction, arbitrators’ powers, challenges under sections 68 and 69, and the enforcement of awards.

We have also sought to provide information on major developments in international arbitration rules, such as the HKIAC (Hong Kong International Arbitration Centre) Rules 2018 and the Prague Rules.

The major arbitration event of 2018 was the CJEU’s decision in Slovak Republic v Achmea BV, even if it has little bearing on the great majority of arbitrations conducted in the UK. To a jurisdiction as arbitrationfriendly as England and Wales, the blow to the ICSID edifice was startling and a rise in jurisdiction challenges in that field is to be expected in 2019.

Of potentially more far-reaching importance was the publication of the much-anticipated Prague Rules. Trailed as the inquisitorial answer to the adversarial IBA Rules, the Prague Rules may offer the Anglo-Saxon arbitration community an alternative to our current procedural model.

These developments aside, 2018 was a solid “business as usual” sort of a year. Practitioners would do well to note the courts’ determination to cut down on the costs wasted by hopeless applications under section 68 of the Arbitration Act 1996, and to confine witness statements to the giving of evidence.

Background

4. The case is a hotly-contested shareholder dispute within the ownership structure of Sheffield United Football Club; the matter is due to come on for trial in a few weeks.
5. In this interlocutory application, one of the parties (Sheffield United Limited) was (inter alia) challenging another party’s (UTB LLC) claims to privilege in respect of certain documents, and seeking disclosure of other defined classes of documents.

Application for Disclosure: the Disclosure Pilot Considered

6. The claim had been issued prior to the commencement of the pilot on 1 January 2019. An order for standard disclosure had already been made, when the application challenging privilege and seeking further disclosure came to be heard in April 2019.
7. Paragraph 1.3 of PD51U states that the “pilot shall not disturb an order for disclosure made before [1 January 2019]”. There had, therefore, been some doubt as to whether the pilot applied in such cases, where there was a pre-pilot disclosure order. Indeed, the editors of the 2019 White Book had stated at 51.2.10 that “The Pilot does not apply to any proceedings where a disclosure order had been made before it came into force unless that order is set aside or varied” [emphasis added].
8. This decision makes clear that the disclosure pilot does indeed apply in all subsisting proceedings within the Business and Property Courts, regardless of when those proceedings began. The Chancellor said, at [15], that the above interpretation in the White Book, of paragraph 1.3 PD51U, was wrong: he stated that although a pre-existing order will not be disturbed by the commencement of the pilot, the pilot will apply to all existing and new proceedings in the Business and Property Courts.
9. At [24] the Court added that simply because paragraph 18 and other paragraphs of the pilot refer to concepts (like “Extended Disclosure” and “Issues for Disclosure”) which did not exist before 1^st January 2019, the pilot will still apply to all cases subsisting in the Business and Property Courts after that date. The Chancellor added that “the Court will interpret the new PD51U in a way that makes it work as effectively” in respect of applications for disclosure in proceedings issued after January 2019, as it will in subsisting cases with pre-existing disclosure orders. Therefore, if an application for further disclosure is made in such proceedings, it will be governed by PD51U, rather that CPR Part 31.
10. In deciding the privilege and disclosure questions in this case, the Court therefore applied the relevant paragraphs of PD51U:

1. When considering the challenge to the assertion of privilege Court therefore turned to paragraphs 14 and 16 of PD51U: judgment at [65] and [72] . For example, paragraph 14.3 PD51U states that the Court may inspect a document over which privilege has been asserted if inspection is “necessary” to determine whether the claimed right or duty to withhold disclosure exists, or to determine the scope of that duty or right;
2. When considering whether to order Extended Disclosure, the Court considered the reasonableness and proportionality of the application (paragraph 2 PD51U), and the continuing obligation for legal representatives to act honestly when giving disclosure, and to conduct a review to satisfy themselves that the claim to privilege is properly made (paragraph 3 PD51U): judgment at [77].

11. By way of commentary on the pilot generally, the Court at [78] was at pains to emphasise that the requirement under the pilot for parties to co-operate and act with proportionality is “of the greatest importance”. The Chancellor also stated at [75] that “the introduction of the Pilot was intended to effect a culture change. The Pilot is not simply a rewrite of CPR Part 31. It operates along different lines driven by reasonableness and proportionality […]”.

Commentary

12. It is therefore clear that, even in a case where an existing order for disclosure has been made, when determining any further applications for (extended) disclosure, the Business and Property Courts will apply the principles laid down in PD51U, with which parties will be expected to have complied.
13. As to the practicalities of that, the Court at paragraph 23 stated somewhat Delpically that:

[…] parties to cases like this, who want to apply to the court for Extended Disclosure under PD51U, should give detailed thought to the new rules and specifically to the way in which they will affect their application.

14. Does that extend to completion of the Disclosure Review Document? That was not made expressly clear; the answer seems to be that it will be necessary to the extent required to determine the application. Here, the List of Issues for Disclosure (rather than a full DRD) was required: the Court considered, at [110], that it would only order Extended Disclosure where that is appropriate to fairly resolve one or more of the Issues for Disclosure. And the Chancellor had noted at [22] that whilst parties had given no advanced thought to the production of ‘Issues for Disclosure’, ‘fortunately’ such lists of issues were ultimately produced, which enabled the court to deal with the applications.

Paul Downes QC and Emily Saunderson of Quadrant Chambers acted for Sheffield United Limited, instructed by Philip Sewell, Shepherd and Wedderburn LLP. 

A copy of the judgment can be found here. 

Simon Oakes

Simon practises in commercial law, with a particular focus on banking & financial services, and complex commercial fraud cases.

Simon has a wealth of experience in some of the most significant banking and financial services cases of recent years, from major interest rate hedging product litigation to regulatory investigations against individuals. He has a deep knowledge of the allegations of LIBOR misconduct against several major banks, a great deal of experience in misselling cases, and a wealth of experience of developing legal and tactical arguments in major commercial litigation.

Significant recent instructions include:

Two ongoing multi-million pound deceit claims against Bank of Scotland and/or Lloyds Banking Group

Aldersgate & Ors v Bank of Scotland & Anor [2018] EWHC 2601 (Comm): a Commercial Court claim in excess of £100 million, alleging fraudulent and negligent misrepresentation arising out of LIBOR manipulation. The case also involved a ground-breaking interlocutory application by the defendant, attempting to withdraw pleaded admissions of findings by global regulators.

The LIBOR test case of Graiseley Properties Ltd v Barclays Bank Plc, Deutsche Bank AG v Unitech Global Ltd [2013] EWCA Civ 1372 (CA), in the Court of Appeal and in the High Court. One of The Lawyer’s‘Top 20 cases’ of 2013.

Hockin v Royal Bank of Scotland in the High Court: a £55 million Financial List banking case concerning interest rate products and the bank’s Global Recovery Group (‘GRG’), and involving issues of misrepresentation, LIBOR manipulation, unlawful means conspiracy and implied duties of good faith.

Viavi v Shannan & Others [2018] EWCA Civ 681: a significant dispute about the validity of deeds, the principle in Re Duomatic, and estoppel by deed.

Advising as to the impact of Brexit on the security of motor insurers.

Having been seconded to both the Financial Services Authority and the Pensions Regulator, Simon has an excellent understanding of how regulators approach cases. He has acted both for and against the targets of regulatory action, including in multi-jurisdictional cases.

Simon is frequently instructed as sole advocate in the High Court, County Court and Employment Tribunals. He also acts as part of larger counsel teams on long-running commercial litigation.

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simon.oakes@quadrantchambers.com

Paul Downes QC

Paul specialises in commercial law, and has specific expertise in banking and finance-related matters.

After taking Silk in 2010, his reputation as a tough, commercially-minded barrister has continued to grow.

Before coming to the Bar, Paul worked for Barclays Bank and was an assistant examiner for the Chartered Institute of Bankers. A direct understanding of the commercial and financial worlds means clients benefit from a practical and user-friendly approach. Paul has also acted as an expert witness overseas in relation to banking regulation in the UK, and is lead contributor to Butterworths LexisNexis Encyclopedia on Forms and Precedents.

Paul also handles general commercial litigation, international trade, media and entertainment, and professional negligence. He acts as an arbitrator in LMAA shipping disputes, commercial disputes and insurance disputes.

He is recommended as a leading silk for commercial dispute resolution in Chambers & Partners UK Bar 2019 and for Banking & Finance, Commercial Litigation, Financial Services and Fraud: Civil in Legal 500 2019. 

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paul.downes@quadrantchambers.com

Emily Saunderson

Emily is a general commercial practitioner specialising in commercial fraud, and banking and finance. She has broad experience in obtaining urgent injunctive relief including freezing orders, asset preservation orders and delivery up orders. Emily’s banking and finance practice has a particular emphasis on financial derivatives instruments, and she is familiar with standard form contracts including the ISDA Master Agreement.

Emily is ranked in the latest edition of Chambers & Partners in commercial dispute resolution and she is recommended as a leading junior in banking and finance and financial services by the Legal 500, where she is described as “technically outstanding, with a very sound grasp of copious quantities of fine detail.”

She has experience in cases involving contractual interpretation and rectification; dishonest assistance; fraud; bribery; fraudulent trading; rights of set-off; contractual estoppel; rights under contracts of indemnity; and guarantees.

Before embarking on a career in law, Emily was a financial journalist covering the global derivatives markets. She brings a strong understanding and useful insider’s perspective on financial markets to her legal practice.

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emily.saunderson@quadrantchambers.com