Ases Havacilik Servis Ve Destek Hizmetleri AS v Delkor UK Ltd

An application under section 67 of the Arbitration Act 1996 may proceed where no agreed arbitral appeal or review process is available. The statutory slip rule does not permit an arbitrator to reconsider a decision, address shortcomings in evidence or argument, or decide the case afresh.

A party that has not participated in the arbitration before the jurisdictional award cannot be prevented by section 73 from advancing grounds of objection on a section 67 application. A counterclaim relied upon solely defensively by way of set-off does not, without more, amount to submission to the tribunal’s jurisdiction. A specific arbitration clause in a framework agreement prevails over an inconsistent clause incorporated only by general reference to standard conditions.

ASES applied under section 67 of the Arbitration Act 1996 to set aside a partial final award in which the arbitrator had accepted jurisdiction over a dispute concerning the supply of a belt filter to a Turkish end user.

ASES had not participated in the arbitration before the jurisdictional award because it was challenging jurisdiction under section 72. It contended that the governing agreement was a Limited Manufacturing Licence containing a Swiss law and Swiss arbitration clause. Delkor relied on its standard conditions, which contained an English arbitration clause, and raised procedural objections under sections 57, 70 and 73. The central issues were whether the section 67 application was admissible and which arbitration agreement governed.

1. The application succeeded. The court set aside the arbitrator’s decision that he had jurisdiction.
2. There was no available arbitral appeal or review process agreed between the parties for the purposes of section 70(2)(a). Section 57(3)(a) did not provide an available recourse. The power to correct an accidental slip, omission, clerical error or ambiguity could not be used to change the arbitrator’s mind, reconsider the award, correct evidential or argumentative deficiencies, or rely on fresh evidence. The principles in Sutherland & Co v Hannevig Brothers Ltd [1921] 1 KB 336, Al Hadha Trading Co v Tradigrain SA [2002] 2 Lloyd’s Rep 512 and Craske v Norfolk CC [1991] JPL 760 supported that conclusion.
3. Section 73 did not prevent ASES from relying on its grounds of objection. Before the award ASES had not participated in the proceedings and therefore had raised no new grounds within the meaning of the section. After participation became unavoidable, it raised its objections promptly. In any event, its essential objection remained that the Swiss clause, rather than the English clause, governed. The approach in Primetrade AG v Ytham Ltd [2006] 1 Lloyds 335 supported the distinction between a new ground and further evidence or argument on an existing ground.
4. The counterclaim was relied upon only to support a defensive set-off. ASES sought no payment or surplus award. That conduct did not constitute submission to the arbitrator’s jurisdiction.
5. On the facts, only the essential terms were agreed initially. The detailed terms, including applicable standard conditions, were not agreed until the later October agreement. The standard conditions were not incorporated. Even if they had been incorporated, the specifically agreed Swiss arbitration clause in the Limited Manufacturing Licence would prevail over the English clause incorporated, if at all, by general reference.
6. The Limited Manufacturing Licence expressly applied to the Bandirma project and operated as the framework agreement for the project contract. Its purpose extended beyond licensed manufacture and included providing market access for Delkor’s products and services. The same result followed under Swiss law. The Swiss arbitration agreement was valid notwithstanding that no particular Swiss city or canton was specified.

First-instance application under section 67 of the Arbitration Act 1996. The court set aside the arbitrator’s partial final award on jurisdiction.