YDU v SAB & Anor.

An arbitral tribunal’s decision may constitute an award even where the tribunal reserves power to revisit or vary its terms in specified circumstances. Finality does not require the tribunal to be permanently functus officio in every respect. Substantive orders for specific performance may be made as awards while leaving the tribunal with supervisory jurisdiction to address changed circumstances. Such decisions may also be characterised as interim measures or provisional awards where the arbitration agreement and applicable rules permit that course. An award can therefore be final and binding for what it decides, while remaining susceptible to alteration upon a material change of circumstances.

The claimant sought declarations concerning a partial final arbitral award made in an arbitration arising from a shareholders’ agreement. The tribunal had ordered specific performance of a share sale and imposed conditions and restrictions governing completion, while reserving jurisdiction to address future developments. It subsequently extended the completion period in two further awards.

The claimant argued that the relevant provisions were merely orders, not awards, because the tribunal had retained power to vary them. Alternatively, it sought remission under section 68(2)(f) of the Arbitration Act 1996 on the ground that the provisions were uncertain or ambiguous.

1. The primary application was dismissed. The challenged provisions were an award within the meaning of the Arbitration Act 1996 and were final and binding for the purposes of section 58.
2. The court applied the substance-based approach identified in ZCCM Investments Holdings plc v Kansanshi Holdings plc [2019] EWHC 1285 (Comm). The tribunal’s description, the formal character of the decision, its detailed reasoning and its treatment of substantive rights were relevant, although no single indicium was conclusive.
3. The ordinary rule that an arbitrator is functus officio after making an award, supported by Cargill v Kadinopoulos [1992] 1 Lloyd’s Rep 1 and Ronly Holdings Ltd v JSC Zestafoni G Nikoladze Ferroalloy Plant [2004] EWHC 1354 (Comm), was not absolute. Under section 48(5) of the Act, and consistently with the Act’s general principles, a tribunal making an order for specific performance may reserve supervisory jurisdiction to determine how that relief should operate if relevant circumstances change.
4. There were two further, alternative analyses. The restriction on disposing of the shares could be regarded as an interim measure, deemed by the arbitration agreement to be a final award as to its subject matter. The challenged provisions could also be regarded as provisional awards under section 39, subject to the tribunal’s final adjudication.
5. The reasoning in Konkola Copper Mines v U&M Mining Zambia Ltd [2014] EWHC 2374 (Comm) supported the conclusion. A decision may be final and binding on its terms notwithstanding that it is conditional or may be affected by a specified future contingency.
6. The alternative section 68 application also failed. The relevant restriction was not ambiguous. It prevented transfer to a third party unless a subsequent award provided otherwise. In any event, any uncertainty would not cause substantial injustice because it could be addressed by a further award.

Both applications were dismissed.