QUEEN'S BENCH DIVISION
Fetter Lane, London, EC4A 1NL
B e f o r e :
| ATLAS POWER LIMITED
HALMORE POWER GENERATION COMPANY LIMITED
THE HUB POWER COMPANY LIMITED
LIBERTY POWER TECH LIMITED
NISHAT CHUNIAN POWER LIMITED
NISHAT POWER LIMITED
ORIENT POWER COMPANY (PRIVATE) LIMITED
SAIF POWER LIMITED
SAPPHIRE ELECTRIC COMPANY LIMITED
- and –
|NATIONAL TRANSMISSION AND DESPATCH COMPANY LIMITED
Timothy Young QC and Marcos Dracos (instructed by Howard Kennedy LLP) for the Defendant
Hearing dates: 18, 19 December 2017
Crown Copyright ©
Mr Justice Phillips :
The background facts
"(a) Any Dispute arising out of or in connection with this Agreement that has not been resolved [under 18.1 or 18.2] shall be settled by arbitration in accordance with the London Court of International Arbitration, as in effect on the date of this Agreement (the "Rules"), by one (1) arbitrator appointed in accordance with the Rules. The arbitration proceedings shall be conducted, and the award shall be rendered, in the English language.
(c) the arbitration shall be conducted in Lahore, Pakistan; provided, however, that if the amount in Dispute is greater than 4 million Dollars ($4,000,000/-) or the amount of such Dispute together with the amount of all previous Disputes submitted for arbitration pursuant to this Section 18.3 exceeds six million Dollars ($6,000,000/-) or an issue in Dispute is (i) the legality, validity or enforceability of this Agreement or any material provision hereof, or (ii) the termination of this Agreement, then either Party may, unless otherwise agreed by the Parties, require that the arbitration be conducted in London, in which case the arbitration shall be conducted in London.…Notwithstanding the foregoing, either Party may require that arbitration of any Dispute be conducted in London (or such other location outside Pakistan as agreed by the Parties), in which case the arbitration shall be conducted in London (or such other location outside Pakistan as agreed by the parties): provided, however, that if the Dispute is not of a type that could have been conducted in London (or such other location outside Pakistan agreed by the parties) in accordance with the provisions of the foregoing sentence, the Party requiring that arbitration be conducted in London (or such other location outside Pakistan agreed by the parties) shall pay all costs of arbitration as and when incurred by the other Party (including out-of-pocket costs but excluding any award made by the arbitrator) in excess of the cost that would have been otherwise incurred by such other Party had the arbitration be conducted in Lahore, Pakistan… "
i) asserting that the Determination had become final and binding 75 days after it had been received by the parties;
ii) requesting the resumption of the arbitration;
iii) exercising its right under section 18.3(c) of the PPAs to designate London as the seat of the arbitration on the ground that the amount in dispute exceeded $4,000,000;
iv) requesting the appointment of a sole arbitrator;
v) amending its claim to seek a declaration that the Determination was final and binding and ordering NTDC to pay the amount specified in the Determination with interest and costs; and
vi) requesting that, once the stay was lifted, the nine arbitrations be consolidated.
i) that the IPPs were not entitled to select London as the seat of the arbitrations, the purpose of section 18.3(c) being to determine the "venue" for the hearing of the arbitration, not its seat. NTDC asserted that the seat was Lahore, Pakistan; and
ii) that, in view of the injunction granted by the Lahore Civil Court, the arbitrations should be stayed.
"16.1 The parties may agree in writing the seat (or legal place) of their arbitration. Failing such a choice, the seat of the arbitration shall be London, unless and until the LCIA Court determines, in view of the circumstances, and after having given the parties an opportunity to make written comments, that another seat is more appropriate."
i) that section 18.3 of the PPAs granted the parties a conditional option to vary the seat of an arbitration and to fix it somewhere other than Lahore. That conditional option was exercised by the IPPs. But, in any event, the LCIA Court had the right to determine the seat and had done so in a manner that was final and binding;
ii) that the Determination was final and binding on the IPPs and NTDC;
iii) that NTDC should provide interim security for the IPPs' claims.
The IPPs' case for the grant of an anti-suit injunction
"16…. In my view they must be taken to have so agreed for the reasons given by the judge. The whole purpose of the balance achieved by the Bermuda Form (English arbitration but applying New York law to issues arising under the policy) is that judicial remedies in respect of the award should be those permitted by English law and only those so permitted. Mr Hirst could not say (and did not say) that English judicial remedies for lack of jurisdiction or procedural irregularities under sections 67 and 68 of the 1996 Act were not permitted; he was reduced to saying that New York judicial remedies were also permitted. That, however, would be a recipe for litigation and (what is worse) confusion which cannot have been intended by the parties. No doubt New York law has its own judicial remedies for want of jurisdiction and serious irregularity but it could scarcely be supposed that a party aggrieved by one part of an award could proceed in one jurisdiction and a party aggrieved by another part of an award proceed in another jurisdiction. Similarly, in the case of a single complaint about an award, it could not be supposed that the aggrieved party could complain in one jurisdiction and the satisfied party be entitled to ask the other jurisdiction to declare its satisfaction with the award. There will be a serious risk of parties rushing to get the first judgment or of conflicting decisions which the parties cannot have contemplated.
17. It follows from this that a choice of seat for the arbitration must be a choice of forum for remedies seeking to attack the award. As the judge said in para 27 of his judgment, as a matter of construction of the insurance contract with its reference to the English statutory law of arbitration, the parties incorporated the framework of the 1996 Act. He added that their agreement on the seat and the 'curial law' necessarily meant that any challenges to any award had to be only those permitted by that Act. In so holding he was following the decisions of Colman J in A v B… [in which] that learned judge said (para 111):
"… An agreement as to the seat of an arbitration is analogous to an exclusive jurisdiction clause. Any claim for a remedy going to the existence or scope of the arbitrator's jurisdiction or as to the validity of an existing interim or final is agreed to be made only in the courts of the place designated as the seat of the arbitration"
That is, in my view, a correct statement of the law."
"55…Time and again the English courts have granted an injunction to restrain a clear breach of an exclusive jurisdiction agreement or a breach of an arbitration agreement whether rights of the parties are clear. In my judgment the position is even stronger where an award has already been issued and the breach of the agreement to London arbitration consists of an unlawful attempt to invalidate the award.
56. It matters not at all whether the US courts would or would not ultimately assume jurisdiction and uphold or vacate the award or whether the US Court in question, under its own conflicts of laws rules, is bound to exercise a supervisory jurisdiction… No questions of comity arise because the mandatory exercise of jurisdiction by a foreign court, in such circumstances, only arises by reason of the breach of contract on the part of the party invoking that jurisdiction. An injunction preventing suit in that court is thus not a breach of international comity preventing a court from exercising what it regards as a mandatory jurisdiction but merely restrains a party to a contract from doing something which it has promised not to do."
NTDC's grounds of opposition to the grant of an anti-suit injunction
"(I) As a matter of English law, if parties choose England as the seat of an arbitration, it is part of their arbitration agreement that any judicial challenge to an award in that arbitration must be made in England under the provisions of the Arbitration Act 1996.
(II) It is a breach of the arbitration agreement for a party to commence proceedings to challenge such an award anywhere save England under the Arbitration Act.
(III) Such a breach is remediable by anti-suit injunction in order (and when it is necessary) to protect the rights of the successful party to the arbitration.
(IV) The normal principles of injunctive relief required injunction to be granted.
(V) The seat of the present arbitrations is England, thus making it a breach of the arbitration agreement in the PPA's for NTDC to commence and continue the Pakistan proceedings, which are therefore vexatious and oppressive require injunctive relief is sought and granted."
i) the reasoning of the Court of Appeal in C v D was based on the presumed intention of the parties in choosing London as the seat of their arbitration in a case where the arbitration agreement was governed by English law, the presumed intention being that the courts of England and Wales would have exclusive supervisory jurisdiction;
ii) the present case can be distinguished because the governing law of the PPAs (and of the arbitration agreement in section 18.3) is the law of Pakistan, so that the provisions as to the choice of seat, and the intended effect of such a choice, must be construed as a matter of the law of Pakistan;
iii) the law of Pakistan, as expounded in the evidence of Mr Justice Shah (retired), is that a contract between Pakistani parties governed by the law of Pakistan cannot exclude the supervisory jurisdiction of the Pakistan courts. Mr Justice Shah refers in particular to s. 28 of the Contract Act and Rupali Polyester v Bunni (1994) 46 APLD 525; and
iv) it follows that the choice of London as the seat of the Arbitration cannot be construed, as a matter of the applicable law of Pakistan, as giving rise to presumed intention that the court of England and Wales have exclusive supervisory jurisdiction: the courts of Pakistan must have at least concurrent jurisdiction, rending it inappropriate to grant (or continue) an ant-suit injunction.
The proper analysis of the determination of the seat of the Arbitration and its effect
(a) NTDC's contention that there is concurrent supervisory jurisdiction
".. it does not matter whether English law is or is not the governing law of the agreement to arbitrate. It is the curial law which governs the question of the validity of the award and challenges to it."
"… it would not qualify as an "agreement to the contrary" in the 1996 Act. Still less would it entitle the defendant to mount a challenge to the award in a country other than the seat of the arbitration."
(b) NTDC's alternative contention that the seat is Lahore, Pakistan
"In this Part "the seat of the arbitration" means the juridical seat of the arbitration designated -"
(a) by the parties to the arbitration agreement, or
(b) by any arbitral or other institution or person vested by the parties with powers in that regard, or
(c) by the arbitral tribunal if so authorised by the parties,
or determined, in the absence of any such designation, having regard to the parties' agreement and all the relevant circumstances."