Republic of Sierra Leone v SL Mining Ltd (Rev 1)

A challenge under section 67 of the Arbitration Act 1996 concerns substantive jurisdiction, not the admissibility of a claim. A contractual condition requiring negotiation or a waiting period before arbitration will ordinarily concern whether the claim should be heard, or heard yet, rather than the tribunal’s power to determine it. Such an issue is for the arbitrators and is not reviewable under section 67. A clause requiring good-faith efforts to reach an amicable settlement before arbitration may create a settlement window rather than an absolute waiting period. Whether settlement will be possible by the end of that period is an objective question assessed at the date of commencement. Consent to commencement may also waive the condition precedent.

The Republic of Sierra Leone challenged under section 67 of the Arbitration Act 1996 a partial final award on jurisdiction in an ICC arbitration brought by SL Mining Ltd. The arbitration concerned the suspension and cancellation of SL Mining’s large-scale mining licence and related licence agreement.

The arbitration clause required the parties to endeavour in good faith to reach an amicable settlement and provided that, if they were unable to do so within three months of written notice, either party could commence arbitration. SL Mining served its notice of dispute on 14 July 2019 but issued its Request for Arbitration on 30 August 2019. The central issues were whether premature commencement affected jurisdiction, whether Sierra Leone had consented to or waived the condition, and how the clause should be construed.

1. Challenge dismissed. The court held that the alleged prematurity of the Request for Arbitration was a question of admissibility, not substantive jurisdiction. Section 67 therefore did not permit the challenge. The distinction was between the tribunal’s power to hear a case and whether a particular claim was appropriate to be heard at that time.
2. Section 30(1)(c) of the Arbitration Act 1996 concerned what matters had been submitted to arbitration, not procedural conditions governing when a claim should be heard. A claim presented too early remained a claim for the tribunal to determine. The arbitrators were best placed to decide whether the contractual precondition had been satisfied.
3. Sierra Leone had consented to the Request for Arbitration being served on 30 August 2019. Its insistence, during the emergency-arbitrator proceedings, that SL Mining comply with the ICC Rules and issue the request within the prescribed time amounted to consent to commencement and waived the three-month condition, if it otherwise applied.
4. Construed objectively, clause 6.9(c) did not impose an absolute bar on arbitration for three months. The period was subsidiary to the obligation to attempt an amicable settlement and created a window for settlement. Earlier commencement was permissible if, objectively assessed at the date of the Request for Arbitration, the parties would be unable to reach an amicable settlement by the end of the period.
5. The relevant question was future objective inability to settle, not whether negotiations had already become futile or whether either party’s motives were blameworthy. On the evidence, the parties would not have been able to reach an amicable settlement by 14 October 2019. There was therefore no breach of clause 6.9(c) in any event.
6. The subsidiary challenge to the emergency-arbitrator procedure also failed. The arbitration clause incorporated the ICC Rules and permitted emergency relief to preserve the parties’ positions pending resolution of the substantive dispute.

First-instance decision. The court dismissed the challenge to the partial final award on jurisdiction and upheld the arbitrators’ jurisdictional conclusion.