Petroleum Company of Trinidad and Tobago Ltd v Samsung Engineering Trinidad Co Ltd

A challenge under section 67 of the Arbitration Act 1996 concerns substantive jurisdiction, not the correctness of a tribunal’s decision on contractual construction, where the matter was properly submitted to arbitration. A party cannot convert a merits complaint into a jurisdictional challenge by characterising the tribunal’s construction of the contract as a limitation on jurisdiction.

The tribunal’s jurisdiction is determined by the arbitration agreement, the agreed terms of reference and the claims actually advanced. A general reference to related agreements does not extend that jurisdiction where no claim, or intimated claim, is made under those agreements.

Samsung commenced ICC arbitration against Petrotrin under the Onshore Agreement concerning extension of time, damages and sums due. Petrotrin counterclaimed for liquidated damages.

The dispute concerned whether the liquidated damages cap was 10 per cent of the Onshore Agreement’s Contract Price or 10 per cent of the aggregate value of the Onshore and Offshore Agreements under the Linkage Agreement. The tribunal applied the lower cap and awarded a Partial Award.

Petrotrin applied under section 67 of the Arbitration Act 1996, contending that the tribunal lacked substantive jurisdiction to apply the lower cap. The central questions were whether the challenge concerned substantive jurisdiction and, alternatively, whether the tribunal’s jurisdiction extended beyond the Onshore Agreement.

1. The application was refused. The dispute about the applicable liquidated damages cap was primarily a question of contractual construction. The counterclaim itself was properly within the tribunal’s jurisdiction, and neither party disputed that the tribunal could determine it. Section 67 does not permit the court to reconsider the tribunal’s answer on the merits merely because that answer is said to be wrong (paras [23]-[32], [51]).
2. The tribunal’s jurisdiction arose from Article 33.4 of the Onshore Agreement. The agreed Terms of Reference identified that agreement as the relevant arbitration agreement. Petrotrin’s pleadings referred to Samsung, the Onshore Agreement and its Contract Price. They did not advance a claim against SECL under the Offshore Agreement or a separate claim under the Linkage Agreement.
3. The later reference to Article 5.2 of the Linkage Agreement was an argument on construction. It neither amended nor extended the Terms of Reference, expressly or by implication. The tribunal therefore had no jurisdiction to determine claims arising under the other agreements. Its finding that no such claims had been brought was a finding of fact which could not be reviewed on a section 67 application (paras [34]-[44]).
4. Authorities concerning broad and commercially minded construction of arbitration clauses, including C v D1 and Others and Norscot Rig Management PVT Ltd v Essar Oilfields Services Ltd, did not assist. Those authorities concerned whether claims under related agreements could be brought in the same arbitration. That situation did not arise because Petrotrin had never brought or intimated a claim under the Offshore Agreement, and SECL was a separate company (paras [45]-[49]).
5. Alternatively, the tribunal was right that its jurisdiction was limited to the Onshore Agreement cap. The application under section 67 consequently failed on both the jurisdictional analysis and the alternative analysis (paras [50]-[53]).