National Iranian Oil Company v Crescent Petroleum Company & Ors.

Where a party alleges that a judgment gives inadequate reasons, the court may consider whether additional reasons should be provided. In doing so, the judge should clarify the reasoning and may revisit earlier findings with an open mind.

Additional reasons do not ordinarily alter the original result where the original reasoning was substantively correct. A jurisdictional objection based on the absence of a non-party must be analysed by reference to the proper construction and scope of the arbitration agreement. Principles of privity and the inability to bind a third party do not necessarily prevent an arbitral tribunal from determining a claim between parties to the arbitration.

The claimant challenged aspects of an arbitral tribunal’s jurisdiction under section 67, contending that the tribunal had determined the existence and amount of a contracting party’s liability to a non-party under a separate contract.

After judgment dismissing the objection, the claimant sought permission to appeal on the ground that the reasons concerning its ratione personae objection were inadequate and cursory. The court considered whether it should provide additional reasons and whether, on revisiting the matter, its earlier conclusions should be changed.

The central issues were whether the objection was materially distinct from the claimant’s construction case concerning the arbitration clause, and whether Iranian law or a Tehran Court of Appeal judgment supported the objection.

1. Additional reasons. The court accepted that it was appropriate to provide limited additional reasons so that the parties would understand the basis of the dismissal. The approach in English v Emery Reimbold & Strick Ltd (Practice Note) [2002] EWCA Civ 605 supported consideration of whether further reasons should be given.
2. Reconsideration. In accordance with the guidance in In re A (Children) (Judgment: Adequacy of Reasoning) Practice Note [2012] EWCA Civ 1205, the court kept an open mind when revisiting its reasoning. That process did not require the court to maintain earlier findings if they proved erroneous.
3. Nature of the objection. The claimant’s pleaded case and expert evidence treated the absence of the non-party as part of the construction issue concerning the words “arising out of or relating to” in the arbitration agreement. No distinct ratione personae objection had been advanced in the manner later suggested.
4. Effect of privity. The principle of privity did not itself establish that the relevant matters fell outside the tribunal’s jurisdiction. Nor would jurisdiction to determine the claim between the arbitration parties necessarily involve making a binding determination of the non-party’s rights.
5. Tehran decision. The Tehran Court of Appeal judgment, Judgment No. 9309970221500726 (20 September 2014), provided no significant support. It concerned construction of a different arbitration agreement and the inability to bind or join a third party without consent. It did not establish a generally restrictive approach to arbitration clauses and did not undermine the reasoning adopted from paragraph 555 of the Partial Remedies Award.
6. Disposition. The additional reasons led to no change in the conclusions reached in the 21 October judgment. The claimant’s objection remained dismissed.

The judgment provided additional reasons following an earlier judgment dated 21 October 2022, after the claimant sought permission to appeal on the adequacy of the reasons given for dismissing its jurisdictional objection. The court maintained its earlier conclusions.