Global developments brought to you monthly by the ITA Board of Reporters
General Editor: Roger Alford
Managing Editors: Elina Mereminskaya & Monique Sasson
Volume XVII - Issue 5
May 2019
 
 
 
 
Recent Cases and Awards (19)
 
 
M.P. v. État belge, Organisation du Traité de l’Atlantique du Nord, Court of Cassation of Belgium, C.16.0346.F, 27 September 2018
 
An arbitration agreement included in a service agreement with NATO, which provides that “any arbitrator shall be a national of one of the member states of [NATO] and shall be subjected to the security rules applicable within [NATO]”, does guarantee the co-contractor an efficient and reasonable alternative to the jurisdictional immunity enjoyed by NATO; ensures the respect of the co-contractor’s fundamental rights, including the right to a fair trial; does not place NATO in a privileged position with respect to the appointment of arbitrator(s); and does not undermine the independence of the arbitrators, their neutrality and impartiality.
 
Author(s): Bernard Hanotiau, Hanotiau & van den Berg; Maarten Draye, Hanotiau & van den Berg; Iris Raynaud, Hanotiau & van den Berg
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: Belgium; Belgium; Belgium
 
Belgium Full text Full text as PDF
 
 
 
 
 
Sea Dolphin Shipping Limited v. Xiamen Jianfa Agricultural Products Co., Ltd., Maritime Court of Xiamen, (2017) Min 72 Xie Wai Ren No. 1, 19 December 2018
 
According to Article III of the New York Convention, when applying for recognition and enforcement of a foreign arbitral award, the application must satisfy the rules of procedure of the country in which the recognition and enforcement is sought for. In this case, the Applicant Sea Dolphin Shipping Limited (“Sea Dolphin” or “Applicant”), a company incorporated and existing in the Republic of the Marshall Islands, applies for recognition and enforcement of a British arbitral award in Xiamen, China. Xiamen Maritime Court (the “Xiamen Court”) dismissed the application on the ground that the identity documents and power of attorney presented by the Applicant to Xiamen Court do not satisfy the requirements on authentication and certification prescribed under the Chinese Civil Procedure Law. In the Ruling, Xiamen Court also clarifies that the Applicant can submit the application again with Xiamen Court or other Chinese court having jurisdiction when its formality documents satisfy the requirements under the Chinese Civil Procedure Law.
 
Author(s): Arthur X. Dong, AnJie Law Firm
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: China
 
China Full text Full text as PDF
 
 
 
 
 
Société Alstom Transport SA et autre v. Société Alexander Brothers Ltd., Court of Appeal of Paris, , 10 April 2018
 
The Paris Court of Appeal reopens the proceedings in the presence of the allegations of corruption in order to investigate all factual and legal elements necessary to determine whether the enforcement of an award violates international public policy in a manifest, effective and concrete way.
 
Author(s): Nataliya Barysheva, CastaldiPartners; Valentine Chessa, CastaldiPartners
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: France; France
 
France Full text Full text as PDF
 
 
 
 
 
Eagle Overseas Properties Inc. v. Shmuel Yechye and Funpark Ltd., District Court of Tel Aviv, 29465-11-16, 20 August 2017
 
The District Court received a request for recognition and enforcement of a foreign arbitral award given by an LCIA sole arbitrator in London. The arbitrator accepted the Eagle’s claim against Funpark Ltd., and its controlling shareholder, Shmuel Yechye. The latter was forced to resign at the age of 70 from his role as CEO of a company mutually owned by both parties. The procedure of recognition and enforcement is governed by the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Respondent's argument, according to which a dispute on retirement age is not capable of settlement by arbitration according to the laws of Israel, was dismissed.
 
Author(s): Avishai Azriel, White & Case LLP
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: Israel
 
Israel Full text Full text as PDF
 
 
 
 
 
APCO Insurance Services LLC v. Sonar Insurance and Reinsurance Company SAL, Court of First Instance of Beirut District, Decision No. 68/29, 19 June 2017
 
On 19 June 2017, the Court of First Instance of the Beirut District ruled that an arbitration clause could remain valid although it does not provide for the name of the arbitrators or their method of appointment.
 
Author(s): Jalal El Ahdab, Bird & Bird
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: Lebanon
 
Lebanon Full text Full text as PDF
 
 
 
 
 
El Natour Travel & Tourism LLC & Natour Travel & Tourism (Partnership) v. El Bab el Sabee LLC, Court of First Instance of Beirut District, Decision No. 34/31, 03 July 2017
 
On 3 July 2017, the Court of First Instance of the Beirut District suspended, in accordance with Article 199 of the Lebanese Code of civil procedure, the civil proceedings until a final judgement in the criminal proceedings is issued.
 
Author(s): Jalal El Ahdab, Bird & Bird
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: Lebanon
 
Lebanon Full text Full text as PDF
 
 
 
 
 
Serbian Privatization Agency v. UAB Arvi ir ko & UAB Sanitex, Court of Appeal of Lithuania, e2T-4-370/2019, 07 January 2019
 
Ruling of the Court of Appeal of Lithuania on recognition and enforcement of Serbian arbitral award. The case concerned enforcement of 4 million EUR arbitral award which included a contractual penalty. The Court of Appeal of Lithuania decided that the arbitral award shall be enforced in its entirety, because the public policy of upholding international arbitration awards outweighs the public policy of refusing to enforce penalty clauses. The Court of Appeal of Lithuania has also rejected arguments of bias of arbitrators and the Serbian arbitration institution.
 
Author(s): Rimantas Daujotas, Motieka & Audzevičius
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Lithuania Full text Full text as PDF
 
 
 
 
 
Kawakawa Station Limited v. The New Zealand Walking Access Commission [2019] NZHC 791, High Court of New Zealand, CIV-2019-485-22, 11 April 2019
 
Kawakawa Station Limited (Kawakawa) was granted consent by the Overseas Investment Office (the OIO) to purchase sensitive land in New Zealand. It was a condition of the consent that Kawakawa would implement recommendations of the New Zealand Walking Access Commission (the Commission) and would refer any dispute over this to arbitration. Kawakawa was dissatisfied with the Commission’s recommendations and issued judicial review proceedings. The Court stayed the proceedings on the basis that Kawakawa was required to refer the matter to arbitration. The Court held that an arbitration agreement may impose obligations on one party alone to initiate the arbitral process.
 
Author(s): Stephen Hunter, Shortland Chambers
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: New Zealand
 
New Zealand Full text Full text as PDF
 
 
 
 
 
Consorcio Mallares v. Gobierno Regional de Piura, Superior Court of Justice of Piura, 00448-2017-0-2001-SP-CI-01, 09 October 2018
 
Decision of the First Civil Chamber of the Superior Court of Justice of Piura, regarding an allegation of lack of motivation and an extra petita award.
 
Author(s): Fernando Cantuarias Salaverry, Law School of Universidad del Pacìfico
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: Peru
 
Peru Full text Full text as PDF
 
 
 
 
 
Sun Travels & Tours Pvt Ltd v. Hilton International Manage (Maldives) Pvt Ltd [2019] SGCA 10, Supreme Court of Singapore, High Court, Civil Appeal No. 221 of 2017, 12 February 2019
 
The Court of Appeal examined the circumstances in which an anti-suit injunction and an anti-enforcement injunction would be granted. Ordinarily, an anti-suit injunction would be granted if a suit is brought in breach of an arbitration agreement or an exclusive jurisdiction clause provided that it was sought promptly and before the foreign proceedings were too far advanced unless there are strong reasons not to grant such an injunction. While an anti-suit injunction operated in personam, they nevertheless interfered with foreign proceedings and therefore should be exercised with caution. Although comity would lose some significance in cases involving arbitration agreement and exclusive jurisdiction clauses since the courts would merely be enforcing the parties’ agreement, delay in bringing an application for an anti-suit injunction would still engage considerations of comity. While the length of delay was relevant, what is of greater importance is the extent to which the delay had allowed the foreign proceedings to have progressed. Importantly, delay could not be justified on the basis that jurisdictional objections were being raised in the foreign court.

Where the foreign court had already issued a judgment, the default position is that the courts are reluctant to grant anti-enforcement injunctions as it interferes with international comity. Where anti-enforcement injunctions are concerned, it is not enough to show that there has been a breach of the arbitration agreement or exclusive jurisdiction clause. Exceptional circumstances must be shown to warrant the exercise of the court’s jurisdiction. This is because an anti-enforcement injunction proscribes the enforcement of a foreign judgment on pain of contempt proceedings in the jurisdiction where the injunction was granted and an anti-enforcement injunction is comparable to nullifying the foreign judgment or stripping the judgment of any legal effect when only the foreign court should set aside or vary its own judgment.

In the present case, the Court of Appeal allowed an appeal against the High Court decision which ordered a permanent restraint against the appellant who was seeking to rely on a Maldivian judgment which relitigated issues in the prior arbitration. The reason for its decision was because the Court of Appeal found that the anti-enforcement was not brought with sufficient promptitude and the delay allowed the Maldivian proceedings to reach an advanced stage. On the facts, the Court of Appeal did not find that there was an exceptional circumstance which warranted the exercise of the Court’s jurisdiction to grant an anti-enforcement injunction.
 
Author(s): Michael Hwang, Michael Hwang Chambers LLC; Rachel Ong, Michael Hwang Chambers LLC
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: Singapore; Singapore
 
Singapore Full text Full text as PDF
 
 
 
 
 
Hutchinson S.A. v. Keunbae Kim, et al., District Court of Eastern Seoul, 2017KaGi1375, 24 May 2018
 
In H. (the “Claimant”) v. K., et al., (the “Respondents) the court accepted the Claimant’s application to recognise a foreign arbitral award and allowing enforcement of the award in a case in which part of the damages awarded were already paid by the Respondents after the award was issued, rejecting the argument that the recognition of the award would be against the public policy of Korea.
 
Author(s): Kun Hee Cho, Kim & Chang; Kay-Jannes Wegner, Kim & Chang
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: South Korea; South Korea
 
South Korea Full text Full text as PDF
 
 
 
 
 
Korea Southern Power Co., Ltd. v. Hyundai Engineering and Construction, Supreme Court of Korea, 2017Ma6087, 02 February 2018
 
The court dismissed the appeal of K. Co., Ltd. (the “Creditor”), upholding the decision of the Seoul High Court (2017Ra20809).  The court held that a party could not apply for a preliminary injunction to suspend the arbitration proceedings alleging the lack, invalidity, nullity or unenforceability of an arbitration agreement.
 
Author(s): Kun Hee Cho, Kim & Chang; Kay-Jannes Wegner, Kim & Chang
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: South Korea; South Korea
 
South Korea Full text Full text as PDF
 
 
 
 
 
WiseLSM Co., Ltd. v. Draeger Korea Co., Ltd. and Korean Commercial Arbitration Board, High Court of Seoul, 2017Na2022139, 20 October 2017
 
The Seoul High Court dismissed the Plaintiff’s claims and overruled the Seoul Central District Court Decision (2016GaHap528323).  The court held that the arbitration agreement was valid and did not violate the ‘Regulation of Standardised Contracts Act’.
 
Author(s): Kun Hee Cho, Kim & Chang; Kay-Jannes Wegner, Kim & Chang
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: South Korea; South Korea
 
South Korea Full text Full text as PDF
 
 
 
 
 
Håkan Hederstierna v. Handelshögskolan i Stockholm (School of Economics in Stockholm), Svea Court of Appeal of Stockholm, Case No. T 9424-07, Case Date 06 September 2009
 
The Claimant-Appellant had without stated reason withdrawn some of his claims during an arbitration and had later initiated a new arbitration making those very same claims. Examining its jurisdiction, the arbitral tribunal had found that the arbitration agreement had been amended or modified between the parties, being terminated with respect to the claims. The tribunal had therefore dismissed the claim due to a lack of jurisdiction. Though the agreement stated that the Defendant-Appellee would be fully responsible for the costs of an arbitration, irrespective of its outcome, the arbitral tribunal had allocated the costs differently as they had found the arbitration agreement had been terminated and thus the regulation on costs was no longer valid.

After the arbitral award was challenged pursuant to Section 36 Swedish Arbitration Act (SAA), the Svea Court of Appeals explained that merely the circumstance that a party withdraws a claim during an arbitration does not mean that the arbitration agreement has been amended or modified. According to the Court, if the Defendant-Appellee was under the impression that such was the intention of the Claimant-Appellant it should have taken measures to gain clarification. Since the agreement had not been altered, the Court found that the arbitration agreement was still valid and that the arbitral tribunal had the jurisdiction to try the claims and set aside the arbitral award in regard the dismissal. The Court also adjusted the arbitral award’s allocation of costs in accordance with what was stated in the arbitration agreement.
 
Author(s): John Kadelburger, Advokat John Kadelburger AB
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: Sweden
 
Sweden Full text Full text as PDF
 
 
 
 
 
Handelshögskolan i Stockholm (School of Economics in Stockholm) v. Håkan Hederstierna, Supreme Court of Sweden, Case No. T 3258-09, 30 November 2010
 
A claimant ("HH") withdraws certain claims in an arbitration and respondent ("HS") does not object and does not insist that the arbitral tribunal rules on those issues. The claimant commences a new arbitration regarding the claims previously withdrawn. The Supreme Court, confirming the judgement of the Court of Appeals to annul the decision of the arbitral tribunal dismissing the Appellee's claim, found that the withdrawal did not constitute an agreement that the arbitration agreement being cancelled.

The Supreme Court found that the Appellant had failed to demonstrate that the Appellee must have been aware that the Appellant was under the impression that the arbitration agreement had been cancelled in regard to the withdrawn claims. Referring to the findings of the Court of Appeals, the Supreme Court found that the arbitration agreement remained valid regarding the claims. 

Given the Court's finding that the arbitration agreement was valid it found that, in a review pursuant to Section 36 of the SAA, the Court is prevented from deciding on the issue of the allocation of costs in the arbitral award. The Court stated that given that the arbitration agreement is valid, the allocation of costs is the exclusive jurisdiction of the arbitral tribunal and it could not deal with the issue. It therefore reversed the judgement of the Svea Court of Appeals as regards the appeals court's decision to set aside the arbitral award as to the allocation of costs.
 
Author(s): John Kadelburger, Advokat John Kadelburger AB
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: Sweden
 
Sweden Full text Full text as PDF
 
 
 
 
 
Håkan Hederstierna v. Handelshögskolan i Stockholm (School of Economics in Stockholm) (Award), , 27 September 2007
 
The claimant commences a new arbitration regarding claims previously withdrawn in a prior arbitration. 

Arbitral Tribunal states that whether the withdrawal results in a new agreement being entered into conclusively and causes the original arbitration agreement to be cancelled must be determined by way of interpretation. The withdrawal alone and the fact that a party does not request the arbitral tribunal to rule on the issues withdrawn can normally by themselvs result in the arbitration agreement to be cancelled. It must be required some further expression of will by the party withdrawing the claim causing the other party to have reason for its understanding that the arbitration agreement is cancelled. The Arbitral Tribunal found that the various procedural actions on the whole by the claimant withdrawing the claims, gave the respondent reason to understand that the arbitration agreement had been cancelled in regard to the claims withdrawn.

Consequently, the Arbitral Tribunal dismissed the claim as it found it lacked jurisdiction and determeind and allocated the cost of the arbitration.
 
Author(s): John Kadelburger, Advokat John Kadelburger AB
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: Sweden
 
Sweden Full text Full text as PDF
 
 
 
 
 
BGer – 4A_386/2018, Federal Supreme Court of Switzerland, 1st Civil Law Chamber, 4A_386/2018, 27 February 2019
 
In an appeal against an arbitral tribunal's decision denying jurisdiction, the Swiss Federal Supreme Court (the "Supreme Court") first clarifies that the appellant's failure to address an obiter dicta cannot negatively affect the appeal's admissibility. It then nevertheless denies the appeal, considering that the arbitral tribunal validly came to its finding that (i) the invoked arbitration agreement was invalid due to the lack of the required special power of attorney and (ii) the alleged subsequent ratification of the arbitration agreement objectively could not be interpreted as such.

The decision serves as a reminder that the Supreme Court exercises judicial restraint even when reviewing arbitral decisions on jurisdiction, where Swiss arbitration law grants it a wider scope of review than with respect to other international arbitration decisions.
 
Author(s): Georg von Segesser, von Segesser Law Offices
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: Switzerland
 
Switzerland Full text Full text as PDF
 
 
 
 
 
BGer – 4A_424/2018, Federal Supreme Court of Switzerland, 1st Civil Law Chamber, 4A_424/2018, 29 January 2019
 
In a doping-related sports-arbitration case, the Swiss Federal Supreme Court (the "Supreme Court") confirmed that the Appellant's right to be heard had been violated. Nevertheless, it came to the conclusion that it had not been established that the violation had a material impact on the outcome. In keeping with its constant jurisprudence, the Supreme Court denied the appeal.
 
Author(s): Georg von Segesser, von Segesser Law Offices
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: Switzerland
 
Switzerland Full text Full text as PDF
 
 
 
 
 
X v. Y, Court of Cassation of Turkey, 23rd Civil Law Chamber, 2018/5560, 29 November 2018
 
In bankruptcy cases under Turkish law, if there is a valid arbitration agreement between the parties, the party who wishes to obtain a decision that declares the bankruptcy of the other party must first initiate arbitration proceedings to determine the existence of its receivables and then resort to the competent court to obtain a declaration of the debtor’s bankruptcy.
 
Author(s): Ismail Esin, Esin Attorney Partnership; Stephan Wilske, Gleiss Lutz
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
Reporter for: Turkey; Turkey
 
Turkey Full text Full text as PDF
 
 
 
 
 
Upcoming Events (1)
 
 
Plano, TX: 31st Annual ITA Workshop and Annual Meeting – Expect the Unexpected: Adjudicating Changed Circumstances in Commercial and Treaty Arbitration (19-21 June 2019)
 
The ITA Workshop, held in Dallas on the third Thursday in June every year since 1989, is widely recognized as the leading conference in the field in the United States. As one participant summarized succinctly, “It is the forum in which legitimate top practitioners gather annually. Thus, the topics are sophisticated, the networking is legitimate, and the social element is valuable.” The Workshop now begins on the preceding Wednesday afternoon, with membership meetings and activities continuing into the following Friday.
 
Author(s): Reporter ITA
 
Source: A contribution by the ITA Board of ReportersDate: 20 May 2019
 
United States of America Full text
 
 
 
 
 
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