Effect of foreign judgment on arbitrators

Arbitrators, in the absence of express wording to the contrary, plainly have jurisdiction to award damages for breach of an arbitration clause. But what is the position if a court has given a judgment in favour of the defaulting party – does this in any way remove their jurisdiction? This important question was discussed by Mr Justice Burton in CMA CGM SA v Hyundai Mipo Dockyard Co Ltd [2008] EWHC 2791 (Comm). The decision has become of pivotal importance in the light of the West Tankers ruling, discussed above.

CMA: the facts

In February 2004, HMD entered into four contracts with subsidiaries of ERS to build four container vessels. The material parts of the contracts were identical. Art XIII provided that any dispute which might arise in connection with the interpretation and fulfilment of the contract would be referred to a single arbitrator in London. Art XIV provided that neither party was entitled to transfer any or all of his rights without the prior written consent of the other, such consent not to be unreasonably withheld or delayed.