Hashwani v Jivraj

An arbitration claim may be an abuse of process where a party deliberately adopts one position in earlier litigation, thereby causing the other party to litigate the dispute, and later brings fresh proceedings on an inconsistent position which could and should have been advanced earlier. Parties must not litigate piecemeal. An arbitration ends when an objectively construed award shows that the arbitrator has completed the matters submitted, even if implementation remains for the parties. A replacement arbitrator will not be appointed where the arbitration agreement shows that the original appointment was personal. Applications for discretionary relief in arbitration matters must also be made promptly.

The claimant and defendant had been parties to a joint venture and to arbitration arrangements concerning its termination. In earlier litigation concerning the claimant’s purported appointment of an arbitrator under the joint venture agreement, the claimant maintained that the earlier process conducted by Mr Ahamed had been conciliation, had ended, and offered no route to resolve the remaining disputes. The Supreme Court ultimately upheld the relevant arbitration agreement.

The claimant then issued these proceedings, asserting that Mr Ahamed had acted as arbitrator, that his arbitration remained live, and that the court should appoint a replacement after his death. The defendant applied to strike out the claim and opposed the appointment on grounds including abuse of process, termination of the arbitration, delay, the personal nature of Mr Ahamed’s appointment, and unfairness.

1. Abuse of process. The claim was struck out. Applying the principles stated by Lord Bingham in Johnson v Gore Wood [2002] 2 AC 1, the claimant had deliberately pursued the 2008 litigation on the basis that Mr Ahamed was not an arbitrator and that his process was at an end. The claimant’s later attempt to proceed on the opposite basis involved unjust harassment and amounted to Henderson v Henderson abuse. The claimant should have advanced the alternative case in the earlier proceedings, or at least informed the court and the defendant of it.
2. The court’s suggested general principle that a party should inform the other side when reserving a point was not itself the basis of the decision. Such notification would generally be desirable, but a reservation would not necessarily prevent a later finding of abuse.
3. Finality of the award. Objectively construed, the December 1993 award was final. Paragraphs 2 and 3 showed that Mr Ahamed had determined all outstanding matters referred to him and left implementation to the parties. Paragraph 4 permitted requests for guidance or clarification but did not reserve jurisdiction to make further substantive determinations. The award therefore ended the arbitration on 17 January 1994.
4. Alternatively, if the arbitration had continued, the conduct of the parties and Mr Ahamed amounted to an implied agreement to abandon it by early 1998. Further alternatively, the parties’ subsequent inactivity established abandonment by the end of 2007, and the claimant was in any event estopped by the premise on which the 2008 litigation proceeded.
5. The claim would also have failed for delay. By mid-1997 it was clear that the claimant could obtain coercive relief only by applying to court. Any application should have been made promptly. Delay until 2013 was inordinate and inexcusable, and the court would have refused discretionary relief on that ground.
6. The arbitration agreement showed that Mr Ahamed’s appointment was personal. Its unusually wide powers and procedural features demonstrated reliance on his personal qualities. The court therefore could not fill the vacancy under section 10(1)(b) of the Arbitration Act 1950.
7. Resuscitating the arbitration would also have been unfair, impracticable and disproportionate because of the age of the dispute, missing evidence, faded memories and uncertainty concerning the underlying transactions. The arbitration claim was dismissed.

• High Court (Commercial Court): the present arbitration claim was dismissed and the claim struck out as an abuse of process.
• Supreme Court: in the earlier litigation, the defendant’s appeal succeeded and the claimant’s appeal failed on the validity of the religious qualification requirement in the joint venture arbitration agreement. The citation is identified in the judgment as [2012] UKSC 40.
• Court of Appeal: the claimant had succeeded to the extent that the qualification requirement was unlawful, but the arbitration agreement was held void because the unlawful provision could not be severed.