Global developments brought to you monthly by the ITA Board of Reporters
General Editor: Roger Alford
Managing Editors: Elina Mereminskaya & Monique Sasson
Volume XVI - Issue 1
January 2018
 
 
 
 
Recent Cases and Awards (19)
 
 
Guz-Mar Technology S.A. (under liquidation) v. ADT Security Services S.A., Court of Appeals in Commercial Matters of the Federal District, Chamber D, 24053/2012/CA2, 30 August 2016
 
The Federal Court of Appeals in Commercial Issues (“Court of Appeals”) reviewed an arbitration clause that, according to the plaintiff, was construed by the defendant abusing its dominant position.
 
Author(s): Federico Godoy, Beretta Godoy
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: Argentina
 
Argentina Full text Full text as PDF
 
 
 
 
 
Commercial Company A v. Commercial Company B, Supreme Court of Cassation of Bulgaria, Decision No. 40 on Commercial Case No. 2448/2015, 29 June 2017
 
Bulgaria is a Model Law country, and it has adopted the principle of its Art.6 that no courts may intervene in arbitration matters unless provided for in the law. This decision clarifies the important issue of whether and in what circumstances the state courts may admit to hear and decide a claim for a declaratory relief that an arbitration clause is null and void. The decision upholds the principle of competence-competence, and allows courts to admit to hear such claims only where no arbitral proceeding is pending and the claimant shows that it has a legitimate interest to obtain a court ruling on the issue.
 
Author(s): Assen Alexiev, Sabev and Partners Law Firm
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: Bulgaria
 
Bulgaria Full text Full text as PDF
 
 
 
 
 
Privatization Agency of the Republic of Bulgaria v. KG Maritime Shipping AD, Supreme Court of Cassation of Bulgaria, Decision No. 189 in Commercial Case No. 1675/2017, 09 November 2017
 
This decision of the Supreme Court of Cassation discusses and clarifies the issue of arbitrability of harship disputes related to privatization agreements. Importantly, the court rules that disputes for revision of privatization agreements, based on the provision of Article 307 of the Commercial Act dealing with hardship, are not arbitrable, because Article 32(5) of the Privatization Act prohibits the parties to privatization agreements to renegotiate them. According to the court, this prohibition limits the freedom of contract of the parties and the possibility to dispose of their rights and obligations, and thus precludes them from agreeing to settle a dispute based on Article 307 of the Commercial Act through arbitration.
 
Author(s): Assen Alexiev, Sabev and Partners Law Firm
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: Bulgaria
 
Bulgaria Full text Full text as PDF
 
 
 
 
 
OLG Frankfurt am Main – 26 SchH 3/17, Higher Regional Court of Frankfurt am Main, 26 SchH 3/17, 26 October 2017
 
If a court is requested to appoint an arbitrator, the court may not consider the admissibility and merits of the arbitration claim, including whether the requirements of a multi-tier arbitration agreement which requires pre-arbitration conciliation are met. Upon initiation of this appointment proceeding in conformity with the arbitration agreement, the court has exclusive authority to appoint the arbitrator, whereas the party that failed to timely appoint an arbitrator may no longer make such an appointment. 
 
Author(s): Richard H. Kreindler, Cleary Gottlieb Steen & Hamilton LLP
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: Germany
 
Germany Full text Full text as PDF
 
 
 
 
 
OLG München – 34 SchH 14/16, Higher Regional Court of Munich, 34 SchH 14/16, 16 August 2017
 
A clause that simply provides for “Arbitration of seller” in a one-page sales contract may constitute a valid arbitration agreement where the competent arbitral tribunal can be determined through interpretation of this clause in the particular case.
 
Author(s): Richard H. Kreindler, Cleary Gottlieb Steen & Hamilton LLP
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: Germany
 
Germany Full text Full text as PDF
 
 
 
 
 
OLG München – 34 SchH 3/17, Higher Regional Court of Munich, 34 SchH 3/17, 18 September 2017
 
German Court has decided that it constitutes an abuse of the right to challenge a judge or an arbitrator if the applicant does not use such a challenge according to its purpose, but rather – systematically – as an instrument to control judicial proceedings and to obstruct judicial actions in cases where the course of a trial does not correspond with the applicant’s expectations and in which the court does not share the applicant’s interpretation of the law or of the factual basis of the case.
 
Author(s): Richard H. Kreindler, Cleary Gottlieb Steen & Hamilton LLP
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: Germany
 
Germany Full text Full text as PDF
 
 
 
 
 
ConocoPhillips Petrozuata B.V., ConocoPhillips Hamaca B.V. and ConocoPhillips Gulf of Paria B.V. v. Bolivarian Republic of Venezuela (Interim Decision), ICSID Case No. ARB/07/30, 17 January 2017
 
The Tribunal in ConocoPhillips v. Venezuela dismissed Venezuela’s Third Application for Reconsideration and declared that Venezuela had breached Article 6 of the Netherlands-Venezuela BIT by unlawfully expropriating Claimants’ investments.
 
Author(s): Dietmar W. Prager, Debevoise & Plimpton LLP; Samantha J. Rowe, Debevoise & Plimpton LLP; Emily R. Hush, Debevoise & Plimpton LLP
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: ICSID; United States of America; ICSID
 
International Centre for Settlement of Investment Disputes Full text Full text as PDF
 
 
 
 
 
Saraya International, S.A. v. LG Electronics Panamá, S.A., Supreme Court of Justice of Panama, Case No. 236-15, 21 March 2016
 
Panama’s Supreme Court rejects appellant's petition to annul an arbitral award, finding that due process requirements concerning notice, procedure, and scope of award were satisfied in the arbitration.
 
Author(s): Ryan Mellske, Three Crowns
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: Costa Rica
 
Panama Full text Full text as PDF
 
 
 
 
 
Instituto de Ciencias y Humanidades v. Innova Publicidad S.A.C., Superior Court of Justice of Lima, 282-2015, 07 March 2017
 
The Second Commercial Chamber of the Superior Court of Lima has partially annuled an arbitral award due to lack of reasons.
 
Author(s): Fernando Cantuarias Salaverry, Law School of Universidad del Pacìfico
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: Peru
 
Peru Full text Full text as PDF
 
 
 
 
 
Kingdom of Lesotho v. Swissbourgh Diamond Mines (Pty) Ltd and others [2017] SGHC 195, Supreme Court of Singapore, High Court, Originating Summons No. 492 of 2016, 14 August 2017
 
This is the first case in Singapore to decide an application for setting aside an investor-State arbitral award on the merits. The case dealt with vital questions of international investment law, including the requirement of exhaustion of local remedies and the definition of “admitted investment” and “investor”. The application succeeded before the High Court, making it an essential case study for members of the international arbitration community. How did the High Court reach the conclusion that the award should be set aside, and what are the implications of the High Court’s reasoning on the distinction between the regimes of investment treaty arbitration and commercial arbitration?
 
Author(s): Michael Hwang, Michael Hwang Chambers LLC; Si Cheng Lim, Michael Hwang Chambers
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: Singapore; Singapore
 
Singapore Full text Full text as PDF
 
 
 
 
 
Heartronics Corporation v. EPI Life Ptd Ltd and Others [2017] SGHCR 17, Supreme Court of Singapore, High Court, Suit No. 192 of 2017 (Summons No. 1372 and 1396 of 2017), 17 October 2017
 
Parties entered into a dispute-resolution agreement wherein the dispute-resolution clause did not provide a simple arbitration agreement, but a hybrid mediation-arbitration clause. The Plaintiff (the “Plaintiff’) commenced proceedings against the Defendants, who applied to the High Court for a stay of proceedings pursuant to s 6 of IAA. Conversely, the Plaintiff opposed the stay application on the basis that the Defendant had repudiated the arbitration agreement through his conduct, to which the Plaintiff accepted. The case raises the antecedent question of whether a hybrid clause is an “arbitration agreement” for the purpose of s 6 IAA, and if so, in what circumstances would the same be unenforceable. 
 
Author(s): Michael Hwang, Michael Hwang Chambers LLC; Rachel Ong, Michael Hwang Chambers LLC
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: Singapore; Singapore
 
Singapore Full text Full text as PDF
 
 
 
 
 
BNP and another v. BNR [2017] SGHC 269, Supreme Court of Singapore, High Court, Originating Summons No. 359 of 2017, 31 October 2017
 
While express written terms of the arbitration agreement usually supersede terms incorporated by reference, the court will look at the parties’ intention and as far as possible read it to make it workable and feasible.

The arbitration agreement stipulated the appointment of an umpire (who would not be part of the tribunal of arbitrators) where the appointment of the third arbitrator cannot be agreed on by the other two nominated arbitrators. The same agreement also stated that the appointment of a third arbitrator is to be done in accordance to ICC Rules (which would be the president and fully involved in the arbitral proceedings). The High Court provided guidance on how this inconsistency with a fundamental impact on the constitution of the arbitral tribunal can be resolved. 
 
Author(s): Michael Hwang, Michael Hwang Chambers LLC; Rachel Ong, Michael Hwang Chambers LLC
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: Singapore; Singapore
 
Singapore Full text Full text as PDF
 
 
 
 
 
Hadiachsyr LLC v. Credit Agricole Bank PJSC, Supreme Commercial Court of Ukraine, 917/735/17, 19 September 2017
 
Ukrainian High Commercial Court issued a decision on jurisdiction regarding arbitration clause validity assessment.
 
Author(s): Yaroslav Petrov, Asters; Olena Sichkovska, Asters
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: Ukraine; Ukraine
 
Ukraine Full text Full text as PDF
 
 
 
 
 
Doppelmayr Seilbahnen G.m.b.H v. Private Industrial Facility "Sirius", Supreme Commercial Court of Ukraine, 910/19022/13, 13 September 2017
 
Ukrainian High Commercial Court commented on deadline for providing information on arbitration agreement existence. 
 
Author(s): Yaroslav Petrov, Asters; Olena Sichkovska, Asters
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: Ukraine; Ukraine
 
Ukraine Full text Full text as PDF
 
 
 
 
 
Nikolay Viktorovich Maximov v. OJSC Novolipetsky Metallurgichesky Kombinat [2017] EWHC 1911 (Comm), CL-2014-000337 and CL-2014-000658, 27 June 2017
 
A foreign court judgment setting aside an arbitration award could itself be disregarded on grounds of bias. Where there is no basis for saying that the partiality of the foreign judges should be presumed because of some personal interest or involvement, a party must establish actual bias. Actual bias can be established by inference as inferred bias. The applicant must show not only that the foreign court’s decisions were wrong or manifestly wrong but were so perverse as for it to be concluded that they could not have been arrived at in good faith or otherwise than by bias.

Obiter, and as to the principle of ex nihilo nihil fit, an English court should not simply accept that a foreign court had set aside an arbitration award, if there were at the least an arguable case that the award had been set aside in breach of natural justice.
 
Author(s): Nicholas Fletcher, Berwin Leighton Paisner LLP
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: United Kingdom of Great Britain and Northern Ireland
 
United Kingdom Full text Full text as PDF
 
 
 
 
 
Zavod Ekran OAO v. Magneco Metrel UK Ltd [2017] EWHC 2208 (Comm), CL-2016-000720, 09 June 2017
 
Proper notice of an arbitration is notice such as is likely to bring the relevant information to the attention of the person notified, taking account of the parties’ contractual dispute resolution mechanism, including any applicable institutional rules. The onus of proof is on the party raising it as a ground of refusal of enforcement of the award.

In the context of international commerce, the fact that a notice of an arbitration is received in England in a language other than English should not in itself affect the validity of the notice, though it might do so, depending upon the circumstances.
 
Author(s): Nicholas Fletcher, Berwin Leighton Paisner LLP
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: United Kingdom of Great Britain and Northern Ireland
 
United Kingdom Full text Full text as PDF
 
 
 
 
 
Eastern European Engineering Ltd v. Vijay Construction (Proprietary) Ltd [2017] EWHC 797 (Comm), High Court of Justice of England and Wales, Queen's Bench Division, Commercial Court, CL-2015-000613, 11 April 2017
 
Security pending the outcome of proceedings to challenge an award in the courts of the seat of an arbitration is the price to be paid for an adjournment sought by an award debtor. However, where the adjournment is sought not by the award debtor but by the award creditor, security cannot be regarded as the price of the adjournment and to impose security in such circumstances would be to require the provision of security as a condition of pursuing a properly arguable challenge. That was wrong in principle.
 
Author(s): Nicholas Fletcher, Berwin Leighton Paisner LLP
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: United Kingdom of Great Britain and Northern Ireland
 
United Kingdom Full text Full text as PDF
 
 
 
 
 
IPCO (Nigeria) Ltd v. Nigerian National Petroleum Corporation [2017] UKSC 16, Supreme Court of the United Kingdom, UKSC 2015/0247, on appeal from 2015 EWCA Civ 1144 and 2015 EWCA Civ 1145, 01 March 2017
 
Section 103(5) of the Arbitration Act 1996 expressly permits an English Court to order security to be provided as a condition of an  adjournment of an application to set aside or suspend an award before a competent authority of the country in which, or under the law of which, it was made. Nothing in s. 103(3) permitted an English court to require security to be provided as a condition of its own determination of an issue raised under that subsection, even if there might be a delay in making that determination.
 
Author(s): Nicholas Fletcher, Berwin Leighton Paisner LLP
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: United Kingdom of Great Britain and Northern Ireland
 
United Kingdom Full text Full text as PDF
 
 
 
 
 
Sinocore International Co Ltd v. RBRG Trading (UK) Ltd [2017] EWHC 251 (Comm), High Court of Justice of England and Wales, Queen's Bench Division, Commercial Court, CL-2016-000098, 17 February 2017
 
If there is prima facie evidence that an award is based on an illegal contract, a court invited to enforce an award should inquire further. In conducting any enquiry, the court must balance the competing public policy considerations of finality of arbitration awards on the one hand with the alleged illegality on the other.

While a court will consider refusing to enforce awards which give effect to fraudulent or illegal enterprises, it will not refuse to enforce a claim under a lawful transaction simply on the basis that the transaction is “tainted”.

Whilst a well-established fraud exception arises in the context of a bank’s duty to pay against apparently conforming documents, there is no basis for the wider proposition that a party who presents forged documents cannot obtain relief from the court in respect of the transaction more generally.

The duty of disclosure in connection with an application for enforcement is not diminished by reason of the fact that enforcement will be stayed until after the respondent has had an opportunity to be heard.
 
Author(s): Nicholas Fletcher, Berwin Leighton Paisner LLP
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: United Kingdom of Great Britain and Northern Ireland
 
United Kingdom Full text Full text as PDF
 
 
 
 
 
Upcoming Events (4)
 
 
Bergisch Gladbach: 16th Petersberger Schiedstage 2018 (23-24 February 2018)
 
On February 23 and 24, 2018, the 16th Petersberger Schiedstage will be held at the Althoff Grandhotel Schloss Bensberg in Bergisch Gladbach. The overarching topic of this year’s event is “International Arbitration on Plant Construction”. Speakers include Klaus Peter Berger, Antje Boldt, Yves Bock, Peter Bracker, Claus Jürgen Diederichs, Ulrike Gantenberg, Heiko Alexander Haller, Herbert Kronke, James Menz, Aisha Nadar, Alfons Schulze-Hagen, Willfred Vedder and Andrea Voßhoff.
 
Author(s): Richard H. Kreindler, Cleary Gottlieb Steen & Hamilton LLP
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: Germany
 
Germany Full text
 
 
 
 
 
Hamburg: Opening Lecture CIDR (14 February 2018)
 
On February 14, 2018, the newly founded Center for International Dispute Resolution (“CIDR”) at Bucerius Law School will host a public opening event in Hamburg to celebrate the official start of its academic work. CIDR was founded by Stefan Kröll and Karsten Thorn. It is intended to become a forum to explore, discuss, and develop issues arising in connection with the resolution of disputes that have an international/transnational element. Furthermore, CIDR aims to investigate how international dispute resolution can be taught most effectively at universities. The event also will provide an opportunity to discuss new developments in American and German arbitration law. George Bermann of Columbia University will give a keynote speech on the topic “From the FAA to the Restatement of Arbitration Law – Taking Stock of the American Arbitration Law”. The speech will be followed by a comment by Gerhard Wagner (to be confirmed) on the status of the project to revise the German arbitration law.
 
Author(s): Richard H. Kreindler, Cleary Gottlieb Steen & Hamilton LLP
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
Reporter for: Germany
 
Germany Full text
 
 
 
 
 
Washington, DC: 15th Annual ITA-ASIL Conference (4 April 2018)
 
The ½-day ITA-ASIL Conference is presented annually in Washington, D.C. by the ITA Academic Council with the American Society for International Law (ASIL) immediately preceding the ASIL Annual Meeting. Scholarship is a hallmark of this conference. The conference concludes with a networking luncheon.
 
Author(s): Reporter ITA
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
United States of America Full text
 
 
 
 
 
Dallas, TX: 30th Annual ITA Workshop and Annual Meeting (20-22 June 2018)
 
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.” 
 
Author(s): Reporter ITA
 
Source: A contribution by the ITA Board of ReportersDate: 29 Jan 2018
 
United States of America Full text
 
 
 
 
 
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