Injunctive Relief and International Arbitration

Hakeem Seriki

• Publisher: Informa Law from Routledge
• Year: 2014
• ISBN:
  9781317685036
• Edition: 1
• Topic: Droit
• Subtopic: Arbitrage, négociation et médiation en droit

This book explores from an English law and Institutional perspective the various types of injunctive relief that are available to a party before and during arbitral proceedings.

In particular, this book examines the basis of the power of English Courts to grant such injunctions and explains when such injunctions will be granted. It considers any limitations attached to such injunctions and the relationship between section 44 of the Arbitration Act 1996 and section 37 of the Senior Courts Act 1981.

It also provides an in-depth analysis of case law and the emerging trends in this area of arbitration, as well as the powers of arbitrators under the ICC and LCIA Rules to grant such relief and other remedies that might be available to a party seeking to uphold an arbitration agreement.

This book will be a vital reference tool for practitioners, arbitrators and postgraduate students.

CHAPTER 1

ARBITRATION AGREEMENTS

Introduction	1.01
Definition of arbitration agreement	1.02
Construction of arbitration clauses	1.15
Unilateral arbitration agreements	1.20
Law governing arbitration agreement	1.29
Seat of arbitration	1.49
Pathological clauses	1.55
Conflicting clauses	1.59
Assignment of arbitration clauses under English law	1.66
Assignment during a pending arbitration	1.68
Termination of arbitration agreements	1.72

INTRODUCTION

1.01 Given that arbitration is a consensual process, the arbitration agreement is very important because without an arbitration agreement, there cannot be a valid arbitral process. National laws¹ and international instruments² make clear that an arbitral award will be refused recognition and enforcement where the arbitration agreement is not valid. This chapter considers the content and form of an arbitration agreement. It discusses:

(a) the definition of arbitration agreement;

(b) construction of arbitration clauses;

(c) unilateral arbitration agreements;

(d) law governing arbitration agreements;

(e) seat of the arbitration;

(f) pathological clauses;

(g) conflicting clauses;

(h) assignment of arbitration clauses; and

(i) termination of arbitration agreements.

DEFINITION OF ARBITRATION AGREEMENT

1.02 Section 6(1) of the Arbitration Act 1996 (“the Act”) defines an arbitration agreement as an agreement to submit to arbitration present or future disputes, whether contractual or not.³ The arbitration agreement between the parties must be in writing.⁴ It is important that the agreement is in writing, as only agreements in writing will benefit from the provisions of the Act.⁵ Arbitration agreements that are not in writing can be enforced at common law.⁶ The New York Convention also requires contracting States to recognise an arbitration agreement in writing.⁷ Under section 6 of the Act, the parties can conclude submission agreement when a specific dispute arises between the parties. A submission agreement is enforceable under the Act.

1.03 There is a requirement under section 5 of the Act that the arbitration agreement is in writing as well as “other” agreements⁸ between the parties. In relation to “other” agreements, these relate to agreements on aspects of the arbitration that are not within the ambit of the mandatory provisions of the Act.⁹ In relation to default provisions under the Act, the parties must clearly oust them expressly by agreement. Pursuant to section 5(2) of the Act, there is an agreement in writing where the agreement is made in writing whether or not signed,¹⁰ the agreement is made by exchange of communication in writing¹¹ and if the agreement is evidenced in writing.¹²

1.04 In relation to section 5(2)(a), there is no requirement for the agreement to be signed.¹³ Section 5(6) of the Act states that “writing” will include “recorded by any means,” and this includes electronic means. In Bernuth Lines Ltd v High Seas Shipping Ltd,¹⁴ the parties agreed that the email correspondence between them constituted “writing” for the purpose of section 5(6) of the Act. What is needed is that the key features of the agreement between the parties are in writing. In Galliard Homes Ltd v Jarvis & Sons plc,¹⁵ it was held that the requirement of writing was not satisfied, as one could not jump from an oral agreement to do “particular works” for a particular price at a particular place to the conclusion that an arbitration provision was agreed by the parties.¹⁶

1.05 Section 5(2)(b) uses the general phrase “exchange of communication.” Given the rapidly evolving methods of recording, the DAC wanted a wide meaning of the word “writing.”¹⁷ In TTMI SARL v Stat Oil ASA,¹⁸ Beatson J rejected the argument by the defendant that the exchange of emails, which referred to arbitration, did not satisfy the requirements of section 5 of the Act. The judge held that the requirements of section 5 were satisfied since one of the emails expressly referred to the charterparty form containing the arbitration clause and the defendant agreed to it by its “notation of OK.”¹⁹

1.06 In relation to section 5(2)(c), it seems to be a safety net provision catching those agreements not in writing but for which there is some evidence in other documentation.²⁰ This section must be read in conjunction with section 5(4). The purpose of section 5(4) of the Act is to afford flexibility in determining the existence or otherwise of an arbitration agreement. This is clear from paragraph 37 of the DAC Report that there was some concern that a writing requirement with respect to every agreement might unduly constrain the parties’ freedom and flexibility. Consequently, section 5(4) seeks to address this fear, as an agreement will be evidenced in writing if recorded by a third party with the authority of the parties to the agreement.²¹ Section 5(4) also has a wider effect – allowing for the recording of an oral agreement at any stage.

1.07 It is important that an arbitration agreement is well drafted because it could save the parties time, effort and resources. With a well-drafted arbitration agreement, there is little scope for one party to delay proceedings by arguing that no valid arbitration agreement was ever concluded by the parties. A well-drafted arbitration agreement should:

(a) properly identify the parties to the agreement (this will normally be the parties to the underlying contract);

(b) contain clear reference to arbitration (it should be clear that any dispute arising out of the agreement shall be finally resolved by arbitration);

(c) identify the seat of the arbitration;

(d) identify the substantive/applicable law that will govern the dispute;

(e) identify the law applicable to the arbitration agreement;

(f) state the number of arbitrators;

(g) state the language of the arbitration;

(h) state the institutional rules to apply; and

(i) state how the arbitrators will be appointed.

1.08 The fact that a clause does not provide for immediate reference to arbitration following the dispute does not mean that it is not an arbitration agreement. It is not uncommon for parties to agree to refer their dispute to experts (and not arbitrators) in the first instance and if they are unable to settle their dispute, the matter can be referred to arbitration.²² Any Alternative Dispute Resolution (ADR) procedure must be exhausted before the dispute can be referred to arbitration.²³ However, any provision purporting to create a condition precedent must be clearly defined and must not lack certainty. This was the position in Tang Wah v Grant Thornton International Limited,²⁴ where Hildyard J held that the provisions in question lacked sufficient definition and certainty. Consequently, the provision did not prevent any party from commencing arbitration. There is a difference between a clause that provides for ADR first, and one that states that upon a dispute arising, the parties can elect to have their dispute resolved by ADR or arbitration. In the case of the latter, if the ADR option is selected, then arbitration ceases to be an option and there is no longer an arbitration agreement.

1.09 There is a difference between an arbitration agreement and other mechanisms aimed at resolving a dispute such as mediation, conciliation and expert determination. In deciding whether or not a clause is indeed an arbitration clause or otherwise, the courts will look at the characteristics of the process in question and what the parties agreed. In Walkinshaw v Diniz,²⁵ Thomas J considered the question of whether or not a reference to a Contract Recognition Board (CRB) was a reference to arbitration. He came to the conclusion that the reference was indeed an arbitration.

1.10 The following characteristics will point to arbitration:

(a) where the procedure in question will enable the parties to ma...