Xstrata Coal Queensland P Ltd (Company Number 098156702) (aka Rolleston Coal Holding PTY Ltd) & Anor v Benxi Iron & Steel (Group) International Economic & Trading Co Ltd

For the purposes of a challenge under section 68 of the Arbitration Act 1996, a material application to correct or clarify an award postpones the commencement of the 28-day period under section 70(3) until the result of that application is known, even where no correction is made.

An award may be uncertain or ambiguous in its effect under section 68(2)(f) where an enforcing court is capable of misunderstanding it, despite English lawyers being able to identify its likely meaning. Substantial injustice may be established by refusal of enforcement abroad and a real risk of further refusals.

The claimants obtained an LCIA award requiring the defendant to pay them jointly for coal supplied under the Oaky Contract. The award named ICRA OC Pty Ltd as a claimant and beneficiary, although the contract referred to ICRA NCA Pty Ltd.

Recognition and enforcement were refused by the Shenyang Intermediate People’s Court. The claimants unsuccessfully sought clarification or correction from the arbitrator under Article 27.1 of the LCIA Rules 1998, following an extension of time granted by Knowles J.

The claimants then applied under section 68 of the Arbitration Act 1996, principally alleging uncertainty or ambiguity as to the effect of the award and substantial injustice.

1. The application was in time. A material application under section 57 of the Arbitration Act 1996, or an equivalent agreed contractual power such as Article 27 of the LCIA Rules, is not an arbitral appeal or review under section 70(2)(a). Where the application is material, time under section 70(3) begins when its outcome is known, even if the application produces no correction. The approach in McLean Homes South East Limited v Blackdale Limited and Al Hadha Trading Company v Tradigrain SA was correct and was supported by Daewoo Shipbuilding & Marine Engineering Company Ltd v Songa Offshore Equinox Ltd.

2. An application is material where the correction or clarification is necessary to enable the applicant to know whether there are grounds to challenge the award. The Article 27 application was material because success would have removed the basis for the section 68(2)(f) challenge and was also directly relevant to the subsidiary section 68(2)(c) ground.

3. Section 68 is a longstop remedy, but it is not confined to cases involving a procedural default by the tribunal. Uncertainty or ambiguity as to the effect of an award may arise under section 68(2)(f) even though its meaning would be apparent to English lawyers, if the wording is capable of being misunderstood by an enforcing court. The reasoning in Mobile Telecommunications Co KSC v HRH Prince Hussam Bin Abdulaziz Al Saud was applicable by analogy.

4. The award was ambiguous in effect because it did not clearly state whether ICRA OC was entitled to recover as the actual contracting party or because the defendant had waived any jurisdictional objection under section 73. The refusal of enforcement in China demonstrated the ambiguity.

5. The ambiguity caused substantial injustice. It had resulted in refusal of enforcement and created a real risk of further refusals. The award was therefore remitted under section 68(2)(f). The court did not need to determine the section 68(2)(c) ground. The application to amend the claim forms to reflect the first claimant’s changed name and address was granted.

The judgment describes an earlier application before Knowles J, who extended time for an Article 27.1 application to the arbitrator. The present judgment then determined the subsequent section 68 challenge. No citation for Knowles J’s judgment is stated.