Lloyd's Maritime and Commercial Law Quarterly
Arbitration Law
Christopher Newman*
CASES
38. A v B 1
Challenges to jurisdiction—LCIA rules—delay
A was the seller and B was the buyer of two consignments of crude oil under a pair of contracts, each of which was subject to English law and contained an LCIA arbitration clause. A commenced a single arbitration seeking payment of the purchase price under each contract from B. B served a response denying liability and reserving the right to raise a challenge as to jurisdiction. Before serving its defence, B challenged jurisdiction on the basis that, in breach of the LCIA rules, Art.1, the request raised two disputes governed by separate arbitration clauses. The tribunal made a partial award, dismissing the challenge on the basis that it should have been brought by the date of service of B’s response. B then applied to the High Court under the Arbitration Act 1996, s.67,2 challenging the partial award.
Decision: Application granted.
Held: (1) The single request for arbitration was invalid. The LCIA rules, properly construed, did not permit the commencing of more than one arbitration whilst paying only a single fee and there had been an ineffective attempt to refer separate disputes to a single arbitration. This meant that the tribunal was without jurisdiction.
(2) B had not lost the right to object by reason of any delay, because the requirement under Art.23.3 that an objection should be raised “as soon as possible” did not create any divergence from the terms of ss 31 and 73 of the 1996 Act (which in any event take effect notwithstanding any agreement to the contrary). Those provisions required the challenge to be made no later than the first step to contest the merits of the dispute and the wording in Art.23.3 did not impose any greater urgency than that.
Comment: This may seem a harsh decision on a technical point, but as a matter of the proper construction of the LCIA rules it is difficult to argue with. It serves as a reminder of the need to comply strictly with the procedural requirements of the relevant arbitral institution.
* Barrister, 20 Essex Street, London.
1. [2017] EWHC 3417 (Comm).
2. s.67: “challenging the award: substantive jurisdiction”.
Arbitration Law
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