ZCCM Investments Holdings Plc v Kansanshi Holdings Plc & Anor

For the purposes of the Arbitration Act 1996, whether a tribunal’s decision is an award depends on substance, not its label. A ruling refusing permission to pursue a derivative claim is procedural where it decides no merits issue, leaves the arbitration on foot and does not render the tribunal functus officio. Alternatively, section 68 is an exceptional long-stop concerned with due process, not merits review. Compressed reasoning is sufficient where the essential issues have been addressed. New correspondence that would not realistically have affected the tribunal’s reasoning cannot establish substantial injustice. The original challenge, fraud challenge and extension application therefore failed.

ZCCM sought permission to pursue a derivative claim in an UNCITRAL arbitration on behalf of Kansanshi Mining PLC concerning transfers of its funds to FQM Finance Limited. The tribunal refused permission in a reasoned ruling, finding no prima facie case of falsity or loss.

ZCCM brought challenges under sections 68(2)(a), (d) and (g) of the Arbitration Act 1996, contending that the ruling was an award, that the tribunal had failed to address material issues or acted unfairly, and that the ruling had been obtained by fraud. ZCCM also sought an extension of time. The defendants argued that the ruling was a procedural order and that available arbitral remedies had not been exhausted. The central issues were the ruling’s status, the scope of section 68, and whether correspondence with the Zambian Revenue Authority could have affected the tribunal’s decision.

Disposition. The Original Arbitration Claim, the Fraud Claim and the Extension Application all failed. The primary reason was that the tribunal’s ruling was not an award, so no challenge under section 68 of the Arbitration Act 1996 arose.

1. Award or procedural order. Classification depended principally on substance. Relevant matters included finality and whether the tribunal had become functus officio, the nature of the issues, the tribunal’s description, the objective form and reasoning, compliance with formal requirements, and the context in which a reasonable recipient received the decision. The ruling concerned permission to pursue a derivative claim, a procedural device. It decided no substantive rights or liabilities, left the arbitration on foot and did not render the tribunal functus officio. Its form and context also indicated a ruling with reasons rather than an award. The approach was consistent with Fletamentos Maritimos SA v Effjohn International BV (No. 2) [1997] 2 Lloyd’s Rep 302 and the other authorities considered on this issue.
2. Section 68 alternatives. Alternatively, the tribunal had dealt with the issues in a constructive and commercially reasonable manner. Under section 68(2)(d), an issue means a dispute requiring determination, not every argument, evidential step or subsidiary question. A tribunal may deal with an issue by deciding a logically anterior point. The tribunal was entitled to triage overlapping claims by resolving falsity and loss, which were common and necessary questions. Its reasoning was compressed but sufficiently clear. This was consistent with Checkpoint Ltd v Strathclyde Pension Fund [2003] EWCA Civ 84 and Secretary of State for the Home Department v Raytheon Systems Ltd [2014] EWHC 4375 (TCC).
3. The tribunal had addressed the allegations concerning fiduciary duties, the ASHA and the interest rate. It had also considered the availability of funds. Any overstatement of common ground did not create substantial injustice. Section 68 was concerned with due process rather than correctness of the tribunal’s conclusions.
4. Exhaustion and fraud. If the ruling had been an award and a failure to decide a claim had been established, Article 39 of the UNCITRAL Arbitration Rules 2010 would have provided an additional-award process, so section 70 would have barred a section 68 challenge until that process was exhausted.
5. The ZRA correspondence showed only limited inconsistency with the case advanced in the arbitration. It did not go to the heart of a substantive determination, add material information, or create a realistic prospect of a different result. The loss finding independently defeated the fraud challenge. The delay in obtaining and deploying the documents also weakened the extension application. The approach in Celtic Bioenergy v Knowles [2017] EWHC 472 (TCC) was materially distinguishable.