C v D

A contractual choice of England as the seat of an arbitration ordinarily means that challenges to an award may be made only through the remedies permitted by English arbitration law. The choice is analogous to an exclusive jurisdiction clause for remedies attacking the award.

A choice of foreign law for the substantive contract does not, without a written agreement directed to a particular non-mandatory provision of the Arbitration Act 1996, introduce additional foreign grounds for challenging the award. Where the law of the arbitration agreement is not expressly chosen, it will usually have its closest and most real connection with the seat rather than the substantive law of the underlying contract.

The parties made a Bermuda Form liability-insurance contract. It provided for New York substantive law but required London arbitration. Following a London arbitral tribunal’s partial award in favour of the claimant, the insurer indicated that it would seek review in New York for an alleged manifest disregard of New York law.

Cooke J granted a final anti-suit injunction preventing that challenge and ordered indemnity costs. The insurer appealed, contending that New York law governed the arbitration agreement and permitted the proposed challenge. The central issue was whether the selection of London as the arbitral seat confined attacks on the award to remedies available under English law.

1. Appeal allowed in part as to costs only. The final anti-suit injunction was correctly granted. The insurer’s proposed New York proceedings would attack a London-seated award by a route the parties had not agreed. The indemnity-costs order was, however, inappropriate on the particular facts.

2. The choice of London as the seat was a choice of the forum for remedies attacking the award. It meant that challenges could be made only under English law. The court approved the proposition that a seat agreement is analogous to an exclusive jurisdiction clause for claims concerning arbitral jurisdiction or the validity of an interim or final award.

3. The policy’s choice of New York law governed the underlying insurance obligations. It did not permit an additional New York challenge for alleged manifest disregard of that law. Although section 58 of the Arbitration Act 1996 is non-mandatory, an agreement to the contrary must be a written agreement concerning the particular statutory matter. A general substantive choice-of-law clause did not satisfy that requirement under sections 5 and 4(5).

4. The court added that the arbitration agreement was separable from the insurance contract. If its governing law had required determination, its closest and most real connection was more likely to have been with England as the chosen seat than with New York as the substantive law. The policy’s finality clause strongly reinforced that conclusion.

5. Indemnity costs were not justified merely because the insurer had intimated, rather than commenced, foreign proceedings. There had been no actual breach of an exclusive jurisdiction or arbitration clause, and the Bermuda Form issues were novel. The wider approach to costs in such cases was left open.

6. The court rescinded the private-hearing order. Anonymity would cease unless supported by evidence within 14 days, and future arbitration privacy or anonymity applications should be supported by written managerial evidence.

• Court of Appeal (Civil Division): In [2007] EWCA Civ 1282, the court upheld the final anti-suit injunction but allowed the appeal as to indemnity costs.
• High Court, Commercial Court (Cooke J): Granted a final injunction restraining a New York challenge to the London arbitral partial award and awarded indemnity costs. No citation for that decision is stated in the judgment.