Minister Of Finance (Incorporated) & Anor v International Petroleum Investment Company & Anor

Where parties choose England as the seat of an arbitration, the court’s supervisory jurisdiction and any later arbitration agreements may create concurrent jurisdiction. A further arbitration agreement does not engage Arbitration Act 1996, section 9, where the relevant matter may be referred either to arbitration or to the supervisory court. The court may nevertheless grant a temporary case-management stay to avoid duplication, delay, cost and inconsistent decisions. The stay does not surrender the court’s supervisory responsibility or require it to accept the tribunal’s conclusions automatically. A party’s right to have a supervisory challenge determined by the court is not ordinarily a right to have it determined first. An injunction restraining the later arbitration requires a just and convenient case, including infringement or threatened infringement of legal or equitable rights, or vexatious, oppressive or unconscionable conduct.

The claimants challenged a consent award made in a first London-seated arbitration under sections 67 and 68 of the Arbitration Act 1996. They alleged that settlement deeds underlying the award were void and had been procured through fraud. The defendants commenced second arbitrations under those settlement deeds and sought declarations that the deeds were valid and binding.

The defendants applied under section 9 of the 1996 Act for a stay of the court challenges. The claimants sought a case-management order preventing or postponing the second arbitrations, and an injunction under section 37 of the Senior Courts Act 1981. The central issue was whether the underlying validity question should first be determined by the court or by the second arbitral tribunals.

1. The court refused a statutory stay under section 9 of the Arbitration Act 1996. Sections 67 and 68 are mandatory provisions and preserve the court’s supervisory jurisdiction over the first arbitration, including allegations that the consent award was procured by fraud or contrary to public policy. The parties’ later arbitration agreements could not remove that jurisdiction.

2. The court held that the supervisory jurisdiction and the second arbitrations were concurrent jurisdictions founded on party autonomy. Section 9(1) applies where a matter is to be referred to arbitration, meaning arbitration alone. It does not apply where the parties have also agreed to the supervisory jurisdiction of the court. The defendants therefore could not use a second arbitration to obtain a section 9 stay of challenges concerning the first arbitration.

3. The court nevertheless granted a temporary case-management stay of the section 67 and 68 challenges. A stay is discretionary and requires a compelling case. This was a rare and compelling case because parallel investigation of whether the settlement deeds were void would create duplication, delay, cost, disorder and uncertainty. The independence, expertise and recent appointment of the second tribunals were relevant considerations.

4. The stay did not abrogate the court’s supervisory role. The court retained control over the later proceedings, could lift or vary the stay, would determine the effect of any issue estoppel, and would decide what further investigation was required and whether relief concerning the consent award should be granted. The claimants’ right to a court determination was not a right to have that determination first.

5. The court refused the injunction under section 37(1) of the Senior Courts Act 1981. It was not just and convenient to restrain the second arbitrations. The court ordered a temporary stay of the section 67 and 68 challenges, granted liberty to apply, refused the section 9 stay and refused the injunction.

First-instance decision. No appellate history was stated in the judgment.