Terna Bahrain Holding Company Wll v Al Shamsi & Ors

An extension of time for a challenge to an arbitral award under Arbitration Act 1996, ss 67 or 68, is exceptional. The court must give particular weight to the length and explanation of the delay, and to any contribution to it by the respondent or tribunal. A deliberate tactical decision to disregard the statutory timetable will ordinarily defeat the application, even if the award is substantial and the challenge might otherwise have merit.

A tribunal does not act unfairly merely because it upholds a pleaded point that received little emphasis. There is no breach of s 33 where the opposing party had a reasonable opportunity to address the point but chose not to do so. A London-seated arbitration agreement also warrants an anti-suit injunction against a foreign challenge to the award, absent strong reason to permit it.

Following a London ICC arbitration concerning joint venture agreements for a cement plant in Sharjah, the arbitrator awarded Terna repayment of its share purchase price and its agreed funding contribution, with interest and costs. The award was based on Terna’s contractual right to rescission after breaches by the individual sellers.

The sellers began proceedings in Sharjah and, almost 17 weeks after expiry of the statutory period, sought an extension to challenge the award in England under Arbitration Act 1996, ss 67 and 68. They also sought to set aside an order enforcing the award. Terna sought an anti-suit injunction to restrain the Sharjah challenge. The central questions were whether the delay should be excused, whether the rescission basis had been unfairly introduced by the arbitrator, and whether the foreign proceedings breached the London arbitration agreements.

1. Extension and award challenges. The extension of time was refused. The delay of almost 17 weeks beyond the 28-day statutory period was substantial. The evidence supported the inference that the sellers deliberately chose the Sharjah forum for perceived tactical or economic advantage, despite knowing that a London award had to be challenged in England. The policy of speedy finality in Arbitration Act 1996, s 1(a), and s 70(3) therefore strongly opposed relief.

2. Serious irregularity. The proposed challenge under Arbitration Act 1996, s 68(2)(a) would in any event have failed. The statutory threshold is high. A tribunal generally breaches s 33 if it determines the dispute on a point which a party has had no fair opportunity to address. That is distinct from a party failing to use an opportunity which the procedure provided.

3. Terna’s statement of claim had expressly sought rescission as alternative relief. The sellers recognised that claim and repeatedly asked the arbitrator to dismiss it. They had a reasonable opportunity to address both the contractual basis for rescission and its financial consequences. The arbitrator was not required to give the point greater oral emphasis or warning before accepting it. The differing monetary consequences of rescission and of the primary damages claim did not itself demonstrate unfairness.

4. The sellers also failed to establish substantial injustice. Their proposed objections depended on propositions of UAE law or factual assertions for which they produced no supporting evidence. The forgery issue did not affect any material issue on which the arbitrator relied.

5. Jurisdiction. The proposed s 67 challenge was unavailable under Arbitration Act 1996, s 73. By participating without objection and seeking dismissal of the rescission claim on its merits, the sellers lost any right to object that it was an unauthorised new claim under the ICC Rules.

6. Anti-suit relief. The continuing Sharjah proceedings breached the agreement to London arbitration and sought to impugn the English court’s judgment enforcing the award. Terna had not submitted to the foreign court or delayed improperly. An anti-suit injunction was therefore granted. The challenges to the award and to the enforcement order failed.

not stated in the judgment.