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IMPORTANCE OF COURT IN RESOLVING DISPUTES AS AGAINST ARBITRATION

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589. The privacy of arbitration meant that there was no public or press scrutiny of what was going on and what was not being done. When courts are concerned it is often said that the “open court principle” helps keep judges up to the mark. But it also allows scrutiny of the process as a whole, and what the lawyers and other professionals are doing, and (where a state is involved) what the state is doing to address a dispute on behalf of its people. An open process allows the chance for the public and press to call out what is not right.
591. And Lord Wolfson KC will forgive my quoting his submission for his client in oral closing argument: “Section 68 is not there to give you a remedy if you instruct an honest lawyer who makes a mess of it or doesn’t take an available point. That is just tough. You have made your arbitration bed and you lie on it”. Blunt and correct. But, unless accompanied by public visibility or greater scrutiny by arbitrators, how suitable is the process in a case such as this where what is at stake is public money amounting to a material percentage of a state’s GDP or budget? Is greater visibility in arbitrations involving a state or state owned entities part of the answer?
— R. Knowles CBE. FRN v. Process & Industrial Developments Limited [2023] EWHC 2638 (Comm)

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TIME LIMIT TO SET ASIDE AN ARBITRATION AWARD

It can easily be observed that the provisions of Section 29 are complementary to the provisions of Section 32 in that they only provide the time limit and the discretion to set aside an award on proof that it contains decisions on matters beyond the scope of the submission to the arbitration. The provisions of...

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PARTY CAN APPLY TO COURT TO SET ASIDE AN ARBITRATION AWARD

The provisions simply provide any of the parties to an arbitration award a discretionary right to request, pray for or seek from a Court of law, an order refusing or declining to accord judicial recognition or enforcement of the arbitral award between them. By dint of the provisions, a party to an arbitral agreement is...

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FROM THE FACTS AND CIRCUMSTANCES OF THIS CASE IT SHOWS THAT ARBITRATION MAY BE MORE OPEN TO FRAUD

582. Regardless of my decision, I hope the facts and circumstances of this case may provoke debate and reflection among the arbitration community, and also among state users of arbitration, and among other courts with responsibility to supervise or oversee arbitration. The facts and circumstances of this case, which are remarkable but very real, provide an opportunity to consider whether the arbitration process, which is of outstanding importance and value in the world, needs further attention where the value involved is so large and where a state is involved. 583. The risk is that arbitration as a process becomes less reliable, less able to find difficult but important new legal ground, and more vulnerable to fraud. The present case shows that having (as here) a tribunal of the greatest experience and expertise is not enough. Without reflection, then a case such as the present could happen again, and not reach the court.

— R. Knowles CBE. FRN v. Process & Industrial Developments Limited [2023] EWHC 2638 (Comm)

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P&ID DID NOT ENTER THE CONTRACT TO JUST GET A SETTLEMENT VIA ARBITRATION, WITH THE INTENTION OF NOT PERFORMING

490. Here, I am satisfied P&ID did intend to perform the GSPA when it entered into it, and that there were means by which it could have done so. Nigeria has characterised the GSPA as a sham and contended that P&ID as a BVI-registered company with no obvious assets, no relevant experience and few employees, had no genuine intention of performing the GSPA, and would never have been able to do so. However P&ID did not have to contemplate performing the GSPA itself with its assets, experience and employees. This is not, as it represented, because it could simply use the work on Project Alpha to perform the GSPA. It is rather because ICIL Group had shown in the past that they could contract in. 491. Whilst P&ID was prepared to bribe in the course of its business, I do not accept it was of the sophistication to conceive at the contract stage a plan to extract large sums of money from Nigeria by means of an arbitration or a corrupt settlement. Consistently, P&ID did not use the GSPA to move directly to arbitration at the first available opportunity. I have found it did not (as alleged by Nigeria) corrupt Mr Shasore SAN. And it appointed, in Sir Anthony Evans, an arbitrator of unquestioned experience, expertise and independence. 492. It is in these circumstances that I have reached the conclusion that the present is not a case in which, when the parties entered into the GSPA, P&ID’s intention was not to perform it but simply to use it as a device to get an award or settlement. However that is not the end of Nigeria’s section 68(2)(g) challenge.

— R. Knowles CBE. FRN v. Process & Industrial Developments Limited [2023] EWHC 2638 (Comm)

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ARBITRATION AGREEMENT MUST SATISFY THE NORMAL REQUIREMENT OF A CONTRACT

My Lords, every Arbitration Agreement must satisfy the normal requirement of a contract such as consensus, capacity and legal relationship. Like any other contract, the terms must be clear and certain. The Court would, however, lean towards a construction that will give effect to the intentions of the parties. Thus, where a contract contained an...

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HIGH COURT DOES NOT SIT ON APPELLATE FUNCTION OVER ARBITRAL PANEL

In the case of Baker Marine Nigeria Limited v. Chevron Nigeria Limited (2000) 3 NWLR (Pt. 681) 939 @ 410, it was held that an application to set aside an arbitral award: “The lower Court was not sitting as an appellate Court over the award of the arbitrators. The lower Court was not therefore empowered to determine whether or not the findings of the arbitrators and their conclusions were wrong in law. What the lower Court had to do was to look at the award and determine whether on the state of law as understood by them and stated on the face of the award, the arbitrators complied with the law as they themselves rightly or wrongly perceived it. The approach here is subjective. The Court places itself in the position of the arbitrators, not above them, and then determines on that hypothesis whether the arbitrators followed the law as they understood and expressed it.”

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