Konkola Copper Mines v U&M Mining Zambia Ltd

Challenges under sections 67 and 68 of the Arbitration Act 1996 are subject to waiver, fairness and substantial-injustice requirements. A party cannot reserve a jurisdictional objection and raise it for the first time in court where it participated in the arbitration with knowledge, or reasonable means of discovering, the objection. Section 68 is a longstop remedy for serious irregularity causing substantial injustice, not an appeal on fact or law. A tribunal may proceed in a party’s absence where due notice and a reasonable opportunity to participate were given. It may also make a final, complete and conditional award, including a payment order subject to a final opportunity to show cause, where the tribunal has determined that the sums are due.

Konkola Copper Mines Plc challenged a second partial final award made in four consolidated LCIA arbitrations arising from mining contracts and related settlement agreements. The challenge relied on sections 67 and 68 of the Arbitration Act 1996.

The applicant alleged that the tribunal lacked substantive jurisdiction over certain monetary and costs claims. It also alleged serious irregularity because the tribunal refused to adjourn a hearing held in its absence, determined substantive matters without further pleadings or evidence from it, and made conditional orders requiring payment unless cause was shown within 14 days.

1. Section 67. The jurisdictional objections failed. The objections had not been raised before the tribunal despite repeated opportunities. Under sections 31(2) and 73 of the Arbitration Act 1996, KCM had waived any objection it knew or should reasonably have discovered. In any event, the claims concerning the guarantees, invoices and LCIA payments fell within the arbitration or had been referred to the tribunal by consent. The LCIA payment claim was also no longer live because administrative adjustments had balanced the parties’ accounts.
2. Section 68. The statutory grounds are a closed list and the applicant must establish substantial injustice. The court should intervene only where the arbitral process has departed substantially from what could reasonably be expected. KCM had received notice of U&M’s applications, the supporting evidence and the proposed hearing procedure. Its failure to respond, attend or provide evidence was a deliberate choice. The tribunal was entitled under section 41(4), section 33 and the LCIA Rules to continue in its absence and to refuse a three-month adjournment.
3. The tribunal had sufficient background knowledge and evidence to determine matters flowing from the first award. It gave KCM a further opportunity to show cause after the second award. The absence of a response did not establish procedural unfairness or substantial injustice, even if arguments about individual invoices might later have been available.
4. A conditional award is permissible. The tribunal had determined that the relevant sums were due and had made complete decisions, while postponing their operation if KCM produced a defence within the specified period. Such an award may be final and conclusive between the parties although conditional. The terminology used by the tribunal was immaterial.
5. The section 68 application therefore failed. The applications under sections 67 and 68 were dismissed. Costs followed the event, with indemnity costs considered justified because the case was out of the norm.