Case Law Updates - 9th August 2021: Arbitration and Repudiation

Application to set aside the arbitration award

Meher v K&K Real Estate Development Ltd [2021] EWHC 1793 (TCC) (01 July 2021)

This case concerns two applications brought by K&K before Mr Roger ter Haar QC. The first application was for a final charging order arising out of a judgment which Mr Haar QC handed down in the case of HT-2020-000445, enforcing arbitration awards in K&K ‘s favour. The second application was made to strike out proceedings brought by Mr Meher to set aside the arbitration awards.

Both applications were heard by Mr Haar QC on 11 June 2021remotely, against Mr Meher’s wishes as the Court was satisfied that this process did not disadvantage him so as to make a remote hearing unjust. Having heard both parties, Mr Haar QC, gave a short judgement refusing to grant extension of time to seek to set aside the arbitration awards and further agreed to L&K’s application to strikeout the proceedings brought by Mr Meher. After Mr Haar QC dealt with the formalities of the application and made an order, K&K started to make its application in respect of costs. At this stage, Mr Meher’s internet connection failed and Mr Haar QC proceeded with the application on paper.

The remaining issues concerned whether K&K should receive the costs of its second application. The Judge had submissions from K&K, but not from Mr Meher.

Decision

Mr Haar QC, held that, K&K as the successful party is entitled to the award of costs. Such costs should be summarily assessed, be limited to £11,000 and subject to Mr Meher applying to seek to set aside the matters dealt with in written judgement within 14 days of the formal handing down of this judgement.

Read full judgement here.

Challenging the decision of Arbitral Tribunal

Schenker (Thai) Ltd v Shell Company of Thailand Ltd [2021] EWHC 1730 (TCC) (24 June 2021)

This case concerns an arbitration claim by which the Claimant challenged the decision dated 18 November 2019 of an arbitral tribunal (“Tribunal”), on the basis that the tribunal had no jurisdiction to determine a claim made by the Defendant in LCIA Arbitration No. 194263.

Dispute and LCIA arbitration proceedings 

The Claimant is a logistic service provider and the Defendant is a producer, supplier and seller of petroleum and other oils. The dispute between the parties arose out of customs services provided by the Claimants for the Defendant.

The allegations were that the Claimant were engaged by the Defendant to perform customs services in respect of a shipment, including making a refund claim for that specific shipment. The Claimant failed to perform this service properly and promptly, due to which a refund was not received by the Defendant.

The Defendant commenced LCIA Arbitration on 20 March 2019 to recover the loss suffered as a result of not receiving the refund. The Claimant immediately disputed the jurisdiction of the Tribunal.

The Tribunal issued a decision on 18 November 2019 declaring that it had jurisdiction to decide the claim, as the purchase contract between the parties contained an arbitration clause which covered the relevant services.

Arbitration Claim

The Claimant disagreed with the Tribunal’s Decision and issued this arbitration claim on 16 December 2019.

The Defendant position was that the Claimant was engaged to perform the custom services pursuant to a purchase contract made between the parties on 1 October 2013. The purchase contract included general terms, including an arbitration clause.

The Claimant position was they entered into a separate, ad hoc contract (a quotation dated 22 August 2017) for the purpose of the custom services in respect of the relevant shipment. The Claimant submitted that this quotation was issued because the re-export services instructed in respect of the shipment were outside the scope of the purchase contract.

The question before the Court was, whether there was a valid arbitration agreement in respect of the dispute between the parties arising out of those services that been referred to arbitration and whether the relevant custom service in relation to the relevant shipment were carried out pursuant to the terms and conditions set out within the purchase contract or the quotation.

Decision

Upon hearing the submissions made by the parties’ leading counsel and upon considering the evidence disclosed before the Court, Mrs Justice O’Farrell, found that the quotation was issued weeks after the Claimant had commenced performing the re-export services and the purpose of the quotation was to provide rates and prices for activities identified in the Rate Sheet. The quotation was never accepted by the Defendant and it was rather treated as the basis for discussion and agreement on the fees to be paid. The invoices paid by the Defendant in respect of the custom services, made specific reference to the purchase orders issued under the purchase contract.

It was held that the payment made by the Defendant was consistent with those services falling within the scope of the purchase contract, rather than the quotation. The Claimant was engaged by the Defendant to perform customs services, pursuant to the purchase contract, not the quotation and the purchase contract contained a valid arbitration clause. Therefore, the Tribunal had jurisdiction to determine the dispute referred and its decision was correct

Read full judgement here.

Claim for Wrongful Repudiation

Cartwright Pond Ltd v Wild [2021] EWHC 1600 (TCC) (11 June 2021)

This was a claim by the Claimant for wrongful repudiation of the contract by the Defendant, entitling them to the balance of the contract price.

The Defendant contended that the conduct of the Claimant was repudiatory on the basis of delay and defective workmanship and that she should be entitled to delay-related losses and the costs of completing outstanding works.

Decision

HHJ Stephen Davies found as a starting point that there was a “contractual obligation upon the claimant to start on 9 July 2018 and finish within 14 weeks by 12 October 2018”.

The Claimant admitted that it did not complete at that date or anywhere near it.

The Defendant had varied the area of tiling and change the size and thickness of the tiles. HHJ Stephen Davies found that although this did lead to some delay, the overall delay of 10 weeks in relation was unreasonable and that this could not explain the delays in relation to the rest of the works.

However, as a caveat to this, the judge also found that the Claimant could not be held legally responsible for failing to chase suppliers when the Defendant had failed to specify what she wanted.  On this basis the Defendant’s case on delay was substantially rejected, and it was found that overall, the Claimant acted with reasonable diligence given the circumstances.

The judge was satisfied that the Defendant’s failure, from 25 February 2019, either to permit the Claimant to return to site to continue with the works or to confirm that she was willing to do so, was undoubtedly a repudiatory breach of her obligation as employer which the claimant was entitled to and did accept on 20 March 2019.

Read full judgement here.

For further information on repudiation please see: Repudiation

Please note, these updates are for educational purposes only and should not be relied on as legal advice.  Barton Legal do not make any representations as to the legal validity of them and any claims that this is legal advice will be unsubstantiated.