Republic of Kosovo v ContourGlobal Kosovo LLC

A challenge under section 68 of the Arbitration Act 1996 requires proof of a breach of the tribunal’s duty to act fairly, a serious irregularity and substantial injustice. The threshold is deliberately high. The court must balance finality with protection against genuinely unfair arbitral conduct.

Procedural orders must be read reasonably and commercially. A tribunal’s reservation that it may appoint an expert does not ordinarily create a promise to obtain further evidence or submissions before deciding the issue. A party that had a fair opportunity to present its case cannot establish irregularity merely because it failed to use that opportunity. Substantial injustice requires evidence that the outcome might well have been materially different.

The Government of Kosovo challenged under section 68 of the Arbitration Act 1996 an ICC arbitration award requiring it to pay ContourGlobal Kosovo LLC €20,053,125.63. The challenge alleged that the tribunal had failed to comply with its duty under sections 30(1)(a) and 33 by determining quantum without giving Kosovo a further opportunity to address the issue after two post-hearing procedural orders.

The orders stated that the tribunal might appoint an expert to investigate the development-cost evidence if it reached the damages issues. The tribunal later declined to appoint an expert and decided quantum on the existing evidence and submissions. The central issue was whether the orders reasonably created an expectation that further evidence or submissions would be invited.

1. The section 68 challenge was dismissed. The court applied the principles summarised in Terna Bahrain Holding Company WLL v Al Shamsi and emphasised the high threshold identified in Obrascon Huarte Lain SA v Qatar Foundation for Education, Science & Community Development.
2. A successful challenge required Kosovo to establish: breach of the tribunal’s section 33 duty; serious irregularity; and substantial injustice. Intervention is reserved for extreme cases in which the tribunal’s conduct is so far removed from what could reasonably be expected that justice calls for correction.
3. The procedural orders, read in their proper context and in a reasonable and commercial manner, did not determine or provisionally resolve the quantum claim. They merely reserved the possibility of appointing an expert if the tribunal reached quantum and explained how it would proceed if that course were adopted.
4. The tribunal was therefore not required to notify the parties of a departure from an earlier procedural position or invite further submissions before deciding not to appoint an expert. The quantum issue had already been addressed comprehensively in the written and oral proceedings.
5. The court also rejected substantial injustice. Kosovo identified no new evidence, analysis or submission that it could have advanced and that might well have produced a significantly different result. The matters relied on had already been addressed, or could reasonably have been addressed, during the arbitration.
6. The award was upheld and the section 68 application was dismissed.

Not stated in the judgment.