ValueLicensing v Microsoft: Claim Proceeds to the Competition Appeal Tribunal

On 16 November 2022, Mr Justice Foxton ordered the transfer from the Commercial Court to the Competition Appeal Tribunal (the “CAT”) of the standalone competition claim of our client JJH Enterprises Limited (trading as ValueLicensing) (“VL”) against Microsoft Corporation, Microsoft Limited and Microsoft Ireland Operations Limited. 

The CAT has listed the case management conference for 9-10 May 2023. 

The CAT was established by the Enterprise Act 2002 as a specialist competition and regulatory tribunal whose remit includes competition claims such as VL’s under the competition rules in Article 101 of the Treaty on the Functioning of the European Union (“TFEU”) and Article 102 TFEU, and Chapters I and II of the Competition Act 1998.  These provisions cover agreements whose object or effect is to prevent restrict or distort competition, and abuse of dominant position.  The CAT panels comprise a High Court Judge as Chair, with two other members who have expertise in finance, economics, law, accountancy and other related areas.

VL believes that the transfer to the CAT will accelerate the hearing of its case.

Mr Justice Waksman recuses himself from Gerrard contempt proceedings

The Charles Fussell team, which included Sasha Wass KC of 6KBW and Michal Hain of Twenty Essex, have persuaded Mr Justice Waksman to recuse himself from hearing ENRC's application for permission to bring committal proceedings against Neil Gerrard in the well-publicised and long-running claim by ENRC against Dechert and the Serious Fraud Office.  A further, full update will follow once the approved judgment is available.

ValueLicensing v. Microsoft: Commercial Court rules in favour of ValueLicensing

The Commercial Court recently handed down its judgment following an application by the Defendants in the case of JJH Enterprises Limited (trading as ValueLicensing and represented by Charles Fussell & Co LLP) (“VL”) against three Microsoft entities, namely Microsoft Corporation, Microsoft Limited and Microsoft Ireland Operations Limited.

The judgment was in respect of Microsoft’s applications to strike out or seek summary judgment dismissing VL’s claims against Microsoft Limited, a UK based entity and the anchor defendant; and in respect of Microsoft Corp’s and Microsoft Ireland Operations Limited’s applications for declarations that the English Court was not the appropriate forum to hear VL’s claims against them.

The dispute between VL and Microsoft has arisen in the context of Microsoft’s ongoing efforts to replace historic perpetual licences with new time-limited subscription licences, and its campaign to incentivise its customers to sign up to new licence terms and pricing arrangements.

VL purchases and resells pre-owned perpetual software licences in the UK and EEA. Given Microsoft’s dominant position in these markets, VL argues that Microsoft has sought to stifle competition in the pre-owned sector since 2016 by effectively paying customers switching to Microsoft’s subscription model not to resell their old perpetual licences. In particular, VL claims to have suffered losses amounting to £269 million (and counting) as a result of breaches by Microsoft of Article 102 (which prohibits the abuse of a dominant position), and of Article 101 (which prohibits anti-competitive agreements) of the Treaty for the Functioning of the European Union and its equivalent provisions of the EEA Agreement and the UK Competition Act 1998.

Mr Justice Picken, following a careful and detailed analysis of the arguments, dismissed Microsoft’s applications in their entirety.

Application for strike-out/summary judgment

In dismissing Microsoft’s application to strike out the claims against Microsoft Limited, Mr Justice Picken considered the roles, relationship and interplay of the various Microsoft entities and, with reference to applicable case law, accepted VL’s assertion that they all formed a single economic undertaking. This is sufficient to fix a legal entity with liability, so that it is not necessary to allege that Microsoft Limited (i.e. Microsoft’s UK-based entity) itself did anything to infringe Articles 101 and 102.  Liability (if established) of all the Microsoft entities concerned would be joint and several.

As a result, the judge held that VL’s pleaded case against Microsoft Limited has reasonable prospects of success and, therefore, dismissed Microsoft’s strike-out/summary judgment application and jurisdiction challenge based upon the necessary and proper party gateway.

The Judge also held in the alternative that VL had a good arguable case against Microsoft Limited as a tortfeasor in its own right.

The forum challenge

Mr Justice Picken accepted VL’s arguments in favour of England being the appropriate forum principally because the claims against Microsoft Limited would proceed in England in any event, and because English law applied to much of VL’s claims. It also made sense for Microsoft’s argument that English competition law should diverge from that of the EU to be determined by the English Court.

ValueLicensing has been advised by Charles Fussell, Jonathan Cohen, Catherine Stockler and Harry Prebensen of Charles Fussell & Co LLP, and represented by Maya Lester QC and Max Schaefer of Brick Court Chambers.

The Court of Appeal pushes back against Barclays on payment fraud

Bank customers increasingly do the work that bank staff used to do by instructing the bank’s IT systems to make payments.  People in business increasingly rely on email or other messaging systems as a form of communication – to the exclusion of other forms.

Fraudsters have recognised an opportunity in this combination of factors. 

Several of our clients have received emails purporting to be from creditors who suddenly change their payment details – some of these emails are entirely credible because they reply to existing and genuine email chains.  Some have unfortunately been taken in by those emails and lost significant sums of money.

This kind of fraud is now common enough to have acquired the name of “authorised push payment” – even an acronym, “APP”.  It means a fraudulent payment where the victim instructs the bank to make the payment to the fraudster.

The victims of such frauds always have the right to sue the fraudster.  But that right is often more illusory than real, since the fraudster (whose real identity is usually unknown) and the money which has been taken will almost certainly be long gone before the fraud is discovered.  The bank which handled the payment is a far more attractive defendant. 

A recent decision of the Court of Appeal (Philipp v. Barclays [2022] EWCA Civ 318) raises the prospect of far more litigation arising from APP fraud.

The facts of the case were that Fiona Philipp and her husband were persuaded by a shadowy figure known only as “JW” (and some other unnamed associates of his) that they were assisting the National Crime Agency and the Financial Conduct Authority by moving their life savings of £700,000 to accounts in the United Arab Emirates.  They also appear to have been persuaded not to trust the police or any banks in the UK.  Barclays Banks made those payments on instructions from Mrs Philipp.  By the time the fraud was discovered, the money was gone.

Mrs Philipp sued Barclays Bank.  She claimed the bank owed her a duty to make enquiries when faced with a request to make such a large payment overseas rather than simply follow her orders.  The bank denied it could owe Mrs Philipp a duty in these circumstances and that it would be unworkable if it did.  The first instance judge dismissed her claim without trial on the basis that, as a matter of law, the bank could not owe her a duty in these circumstances.  She appealed.

The Court of Appeal rejected the bank’s contention that the duty was unworkable and the case will be sent back for trial.  What is likely to be relevant to clients and practitioners, however, is that the Court went further than that in two important respects.

First, the Court of Appeal held that the duty established by Barclays Bank v Quincecare [1992] 4 All ER 363 does not only apply to cases where agents of the victims make fraudulent payments.  Many of the reported cases concern rogue company directors diverting money to their own pockets or other businesses they own and the bank had argued (in summary) that this meant the duty owed to the customer was limited to cases where agents were involved but the authority to make the payment was vitiated by the agent’s dishonest conduct – because the customer had not really consented to the payment at all.  That would not help Mrs Philipp, who gave the relevant instruction herself.  The Court of Appeal ruled that the duty was broader than that and applied irrespective of whether some third party was involved.

Second, and potentially even more helpful to claimants in this kind of case, the Court of Appeal suggested that summary judgment (meaning determining the claim without the usual evidence-gathering process and a trial) may not be available in this kind of case.  This will mean that banks cannot apply to strike out cases like Mrs Philipp’s and will be committed to trials involving analysis of the actions of bank staff and (the Court of Appeal suggests) expert evidence of good banking practice at the time the relevant payment is made.  The implications in terms of cost alone for the banking sector are significant and may mean that banks are quicker to settle such claims in future.

We have significant experience of this and similar issues.  For practical advice and guidance, please contact us.

Charles Fussell & Co LLP acts for Congolese Mining Co. in chasing assets in $16.7M award fight

As reported in Law360 and the New York Times, Charles Fussell & Co LLP has been acting for Katanga Contracting Services SAS (“KCS”) in its proceedings against Tenke Fungurume Mining SA since 2019.

Charles Fussell & Co LLP was initially instructed to advise on a series of contractual disputes and KCS was subsequently awarded in excess of $16,000,000 by an ICC arbitral panel. Charles Fussell & Co LLP is now advising on the enforcement of this award, including instructing Counsel in New York proceedings and seeking disclosure of TFM’s assets and applying to freeze relevant bank accounts and seeking asset disclosure in the High Court of England & Wales.

The article below is taken from Law360 https://www.law360.com/newyork/articles/1468987

Congolese Mining Co. Chases Assets In $16.7M Award Fight

By Joyce Hanson 

Law360 (February 28, 2022, 8:40 PM EST) -- A Congolese mining company has asked a New York federal court to compel Bank of America to produce financial information about another mining company after gaining a U.K. court’s permission to enforce a $16.7 million arbitral award.

Katanga Contracting Services SAS said in a Friday memo supporting its request that Bank of America NA conduct expedited discovery that it seeks to enforce a valid judgment obtained in the United Kingdom over a series of contractual disputes against Tenke Fungurume Mining SA, a large copper and cobalt producer in the Democratic Republic of Congo. Katanga said it has various contracts with Tenke, including contracts for the construction of storage facilities.

Tenke maintains a Bank of America account in New York, according to Katanga, which wants the bank to disclose Tenke’s assets so that Katanga can freeze its funds as it looks to collect the award granted by an International Chamber of Commerce tribunal in London on Aug. 26 following arbitration proceedings.

Katanga Contracting Services has a reasonable belief that Tenke Fungurume Mining is taking steps to dissipate its assets or otherwise make them unreachable by transferring large sums of money previously held outside of the Democratic Republic of Congo into bank accounts within the DRC, where enforcement proceedings are considerably more difficult; Katanga said.

Tenke is now in default of its obligation to remit payment of what it owes Katanga, according to the company’s Friday petition against Bank of America. Katanga said that the initial award was $16.2 million, while the final award now totals $16.7 million.

On Dec. 13, Katanga said, it filed a claim in the High Court of Justice, Business and Property Courts of England and Wales Commercial Court, seeking disclosure of Tenke’s worldwide assets. The asset disclosure application has been set for a half-day hearing on March 25, Katanga said.

In addition, the company said, it filed an application in the High Court on Thursday for a worldwide freezing order.

Katanga now seeks discovery from Bank of America in its petition before the New York federal court in aid of the asset disclosure application and the freezing order application.

On Feb. 11, Katanga’s English counsel, Charles Fussell, received the bank’s response, which showed that Tenke’s accounts in New York contained only $1.6 million, according to Katanga. That sum has since been restrained, but there is reason to believe that Tenke Fungurume Mining previously transferred over $150 million from its Bank of America accounts to an account within the DRC. Katanga said.

Katanga’s petition requests authorization to subpoena the bank for records showing where the funds previously held in those accounts were disbursed, as well as the date or dates on which those funds were transferred.

Representatives for Katanga and Bank of America did not immediately respond Monday to requests for comment. Katanga is represented by Andrew St. Laurent and Michelle Fox of Harris St. Laurent & Wechsler LLP.

Counsel information for Bank of America was not available. The case is Katanga Contracting Services SAS v. Bank of America NA, case number 1:22-mc-00061, in the U.S. District Court for the Southern District of New York.

“His Job to Sort it Out” - Understanding the Scope of a Professional’s Duty to a Client

A client who intends to bring a professional negligence claim told us recently:

It’s like this: when I take my car to the mechanic, I don’t know what’s wrong with it. He does. And it’s his job to sort it out.

We suspect most clients see the engagement of professionals in this way. They are entrusted with a job and it is their responsibility to ensure that job reaches a successful conclusion. If it does not, the professionals involved – or their insurers – should compensate the disappointed client for their failure to bring the job to a successful conclusion.

Unfortunately, this is not an accurate statement of the law in England and Wales.

A professional can only ever be liable for losses which fall within the scope of the duty undertaken by that professional. We find that this concept confuses clients most when faced with the possibility of a claim against a professional adviser but it is vital to get it right at the outset because it limits what claims can be made.

This is not a straightforward task because even judges disagree on how the concept of the scope of duty should be stated. The decision of the Supreme Court on this issue in Manchester Building Society v. Grant Thornton UK LLP [2021] UKSC 20 comprises 77 pages and three different judgments. While they all agreed on the outcome, the justices gave three different sets of reasons for that outcome. Legal academics and law students are likely to be reading it for some years to come.

The majority sets out a six-stage test for deciding whether a claimant can recover damages from a defendant in a negligence claim. The question of the duty undertaken is relevant to the second and fifth stages of that test. According to the majority:

the scope of the duty of care assumed by a professional adviser is governed by the purpose of the duty, judged on an objective basis by reference to the reason why the advice is being given

and

in the case of negligent advice given by a professional adviser one looks to see what risk the duty was supposed to guard against and then looks to see whether the loss suffered represented the fruition of that risk.

The Supreme Court has also made it clear that there is no longer understood to be a distinction between “advice” and “information” cases.

An “advice” case was one where the professional was understood to have taken responsibility for the whole transaction at hand (such as our client’s example of the mechanic).

An “information” case was one where the professional had simply given information in response to a request from the client which the client used in making its own decision. The professional could still be sued if the information was wrong (which is what happened to Grant Thornton in this case) but the liability was always limited to the consequences of the information being wrong. In practice, this was fertile ground for defendants and their insurers – as the history of the case shows. The Manchester Building Society lost this case before every judge in the Commercial Court and the Court of Appeal and had to come to the Supreme Court to recover any significant damages.

The Supreme Court was also keen to discourage lawyers from arguing too much about “counterfactual” scenarios. These are scenarios describing what would have happened if the correct advice had been given. Human ingenuity (and the desire of insurers to avoid paying out on claims) being what it is, a great deal of energy is normally devoted to such hypothetical questions – or (as the Supreme Court puts it) “litigation by way of contest between elaborately constructed worlds … increasingly untethered from reality”.

It remains to be seen whether (as it was no doubt intended) the Supreme Court’s decision will simplify the arguments arising on claims against professionals.

However, it is clear that:-

(1) All claims require an objective analysis of the duties undertaken before they can get off the ground.

(2) In most cases, that will involve expert opinion evidence on the relevant professional duties and standards.

(3) In every case, it will involve a legal analysis of the scope of the duty and how it fits into the six-stage test laid down by the Supreme Court.

As a firm, we have significant experience dealing with claims against professional advisers, including solicitors, accountants, surveyors and architects. If you have reason to complain about your professional adviser, please contact us to discuss the issues.

Terminating non-performing contracts

A recent case in which we were involved (Digital Capital Limited v. Genesis Mining Iceland EHF [2021] EWHC 2462 (Comm) raises a perennial problem arising from long-term commercial contracts: how does an aggrieved party go about terminating a contract which it does not believe the other contracting party has performed, or ever will perform?

The law starts from the proposition that both parties to a contract should do what they have promised to do. If one side breaches its promise in some way, that does not mean the other party can walk away from the contract: instead, it should perform its own obligations and sue for the financial losses caused by the other party’s breach. However, if that breach is sufficiently serious, then the law recognises that the contract is at an end.

But who decides what is sufficiently serious? And how?

Like all legal problems, this has a long history. The current formulation of the law most practitioners would accept is that a breach of contract has to be sufficiently serious that it manifests an intention no longer to be bound by the contract. That has the advantage of doing away with the potentially confusing terminology of the past but the disadvantage of requiring detailed analysis of the issues. That takes time and, as all clients know, money.

To navigate these difficult waters, lawyers have taken to drafting termination procedures in long-term contracts which set out mechanisms which usually involve:-

(1) the parties having the right to terminate for no reason provided they give each other sufficient notice; and

(2) in the case of an alleged breach of contract:-

(a) the party who is aggrieved giving a notice of the breach and requiring the other party to remedy it,

(b) the party alleged to be in breach having the opportunity to remedy the breach, and

(c) allowing the party who is aggrieved to terminate the contract if the breach is not remedied.

Few clients realise that this contractual regime exists independently of the common law regime described at the beginning of this article. The Court of Appeal has made it clear that parties cannot be assumed to have given up their common law rights unless it is clear from the contract they have agreed to do so. Clients rarely realise that they had an opportunity – usually before they have called their lawyers – to “accept” a repudiatory breach by a counterparty but have inadvertently “affirmed” the contract and lost that opportunity.

Equally, few practitioners realise that a sufficiently comprehensive termination regime might oust the common law regime. It is all a matter of construction. If the surrounding contract contains an “entire agreement” clause, which is normal, and (less frequently) a clause limiting to the greatest extent permitted all the parties’ other legal rights, it might be sufficient to persuade a Court that the parties have in fact agreed that their termination regime should replace their common law rights. This was a point taken by the judge (on her own initiative – and during closing submissions) in the trial of the case in which we were involved.

To answer the question posed at the beginning of this article, any client considering the termination of a long-term commercial contract needs a clear strategy from the outset. That involves:-

• a careful review of what rights and obligations actually exist,

• evaluating the evidence of the breaches which might be relied upon,

• weighing up the risks and benefits of every course of action available, and

• formulating a clear plan for termination and mitigating any downside risks.

For practical advice and guidance on this and similar issues, please contact us.

Charles Fussell & Co LLP instructed Charles Kimmins QC and Mark Tushingham on the matter of Tenke Fungurume Mining SA v Katanga Contracting Services SAS

Charles Fussell & Co LLP instructed Charles Kimmins QC and Mark Tushingham on the matter of Tenke Fungurume Mining SA v Katanga Contracting Services SAS [2021] EWHC 3301 (Comm). The article below is taken from Twenty Essex’s website; https://twentyessex.com/third-party-funding-costs-and-covid-19-adjournments-section-68-challenge-to-icc-award-dismissed/

Third party funding costs and COVID-19 adjournments: section 68 challenge to ICC award dismissed

Tenke Fungurume Mining SA v Katanga Contracting Services SAS [2021] EWHC 3301 (Comm)

On 7 December 2021, the Commercial Court handed down judgment in Tenke Fungurume Mining SA v Katanga Contracting Services SAS [2021] EWHC 3301 (Comm). Moulder J rejected a challenge to an ICC award brought by the unsuccessful respondent in the arbitration (TFM) under section 68 of the Arbitration Act 1996 (the “Act”).

Charles Kimmins QC and Mark Tushingham, instructed by Charles Fussell & Co LLP, acted for the claimant (KCS) and successfully resisted TFM’s section 68 challenge.

Moulder J’s judgment addresses two issues which will be of interest to users of arbitration:

• The recoverability of third party funding costs incurred by claimants in London-seated arbitrations and whether an award of such funding costs can amount to an excess of powers under section 68(2)(b) of the Act; and

• The circumstances in which a party can raise a challenge under section 68(2)(a) of the Act to an arbitral tribunal’s discretionary procedural decision to refuse a request for an adjournment of an arbitration, in this case on the grounds of COVID-19.

Background

In two consolidated ICC arbitrations, commenced in January 2020, KCS sought to recover sums due from TFM under contracts for mining services carried out by KCS at TFM’s mine in the Democratic Republic of Congo (DRC).

On 26 August 2021, an ICC Tribunal comprising Mr Charles Kaplan, Mr Jeffrey Gruder QC and Dr Achille Ngwanza issued its Final Award. KCS was awarded all sums claimed and TFM’s counterclaims were dismissed. TFM was also ordered to pay US$ 1.4 million in respect of KCS’s legal and expert costs as well as an additional US$1.7 million in respect of funding costs which KCS had incurred to fund its legal fees in the arbitration (the “Funding Costs”). The tribunal also refused TFM’s requests for an adjournment of the arbitration on the grounds of COVID-19.

TFM sought to challenge the Final Award under section 68 of the Act. TFM argued that the tribunal’s decision to award Funding Costs to KCS amounted to an excess of powers under section 68(2)(b). TFM also argued that, by refusing its requests for an adjournment, the tribunal breached its duty under section 33 of the Act to conduct the arbitration fairly and committed a serious irregularity under section 68(2)(a). TFM’s arguments were rejected by Moulder J.

TFM’s challenge to the award of Funding Costs

KCS sought to recover its Funding Costs from TFM in the arbitration. KCS’s Funding Costs comprised: (i) a fixed fee payable by KCS to the funder of 100% of the amount of the funding (namely US$1.3 million) if KCS was successful in the arbitration; (ii) a variable fee of US$214,317; and (iii) a success fee payable by KCS to its solicitors under a conditional fee agreement.

In its Final Award, the tribunal held that it had the power to award these Funding Costs to KCS as “legal and other costs” within the meaning of section 59(1)(c) of the Act and Article 38(1) of the ICC Rules. The tribunal also held that the “principal issue that the Tribunal needs to decide in relation to the claimed funding costs is whether they are ‘reasonable’ in two respects: as to the principle of [KCS] having recourse to this type of funding and as to the amount.” The tribunal answered both questions in the affirmative and awarded the Funding Costs to KCS.

In reaching its decision, the tribunal relied on Essar Oilfields Services Ltd v Norscot Rig Management Pvt Ltd [2016] EWHC 2361 (Comm), [2017] Bus LR 227 (“Essar”). In Essar, the tribunal held that it had the power to award funding costs incurred by the claimant in the arbitration on the basis that these were “other costs” within the meaning of the Act and the ICC Rules. The respondent in Essar argued that the tribunal had exceeded its powers under section 68(2)(b) by awarding these funding costs. HHJ Waksman QC rejected this challenge in Essar.

HHJ Waksman QC held—relying on Lord Steyn’s speech in Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43, [2006] 1 AC 221—that an allegedly erroneous exercise by a tribunal of an available power to award costs could not amount to an excess of powers under section 68(2)(b). The tribunal undoubtedly had the power to award “legal and other costs” under the Act and the ICC Rules. If the tribunal had erred, it was (at most) an alleged error of law as to the meaning of the term “other costs” which could only be appealed under section 69 but by agreeing to the ICC Rules the parties had excluded the right of appeal on a point of law.

HHJ Waksman QC also held that as a matter of language, context and logic, the term “other costs” in the Act and the ICC Rules was wide enough to include the costs incurred by the claimant of obtaining funding and that such funding costs fell within the arbitrator’s general costs discretion. The requirement of reasonableness (a term used in both the Act and the ICC Rules) served as an important check and balance on the recoverability of such costs.

In support of its section 68 challenge, TFM sought to argue that Essar was wrongly decided and that the tribunal had exceeded its powers under section 68(2)(b) by awarding Funding Costs to KCS. Moulder J declined to depart from Essar; taken at its highest, the tribunal had erroneously exercised an available power to award “other costs” which was not susceptible to challenge under section 68 (see [93]-[94]). Moulder J also held that, having agreed to exclude any right of appeal on a point of law under section 69, “it is not open to a party to circumvent [that agreement] by characterising an alleged error of law as an excess of power” (see [95]).

Moulder J’s judgment is an orthodox application of Lord Steyn’s test in Lesotho Highlands for what can and cannot amount to an excess of powers. The judgment confirms that section 68(2)(b) is a narrow gateway which cannot be used as a vehicle to enable a party to dress up an alleged error of law as an excess of powers.

TFM sought permission to appeal to the Court of Appeal against Moulder J’s decision in relation to the award of Funding Costs. Moulder J declined to grant permission to appeal, holding that the appeal had no real prospect of success and that any appellate consideration of the issue of law as to whether funding costs are recoverable in arbitration “would only fall to be considered in the context of a section 69 appeal”.

In the meantime, therefore, it seems plain that an arbitral tribunal seated in London (whether applying the Act, the ICC Rules or other institutional rules) can in principle award funding costs to a successful claimant in an arbitration if the tribunal considers those costs to be reasonable.

TFM’s challenge to the refusal to grant an adjournment on COVID-19 grounds

As to TFM’s challenge under section 68(2)(a) to the tribunal’s decision to refuse TFM’s requests for an adjournment of the arbitration on COVID-19 grounds, Moulder J held that the court should be “extremely slow to interfere” with the tribunal’s discretionary procedural decisions: “The fact that a different tribunal may have arrived at a different decision is not sufficient to interfere: it has to be a ‘conclusion which no reasonable arbitrator could have arrived at in the case in question having regard to his duties under s33’” (see [62]). Moulder J held that TFM had failed to meet this very high threshold.

TFM’s first adjournment request was sought on the basis that its leading counsel in the arbitration had contracted COVID-19 in January 2021 and was unable to prepare for the merits hearing in March 2021. The tribunal rejected TFM’s adjournment request on the basis that: (i) the parties’ arbitration agreement required the arbitration to be “concluded as expeditiously as possible”; (ii) TFM was already represented in the arbitration by a highly qualified legal team; and (iii) TFM could still engage replacement leading counsel if it acted promptly. Moulder J held that the Tribunal was “required to consider all the circumstances and did so” (at [60]) and that “the Tribunal was entitled to take the view that TFM was assisted in the proceedings by a highly qualified legal team from a reputed international law firm, including a senior partner with considerable experience as counsel in international arbitration” (at [61]).

TFM’s second adjournment request was sought on the basis that travel restrictions caused by the COVID-19 pandemic had prevented TFM’s mining expert from travelling to the DRC to carry out a site visit at TFM’s mine in connection with TFM’s counterclaim for alleged defective work. The tribunal rejected TFM’s request to adjourn the arbitration to enable a site visit to take place because: (i) both parties’ experts had agreed that a site visit was not necessary for three out of the five alleged defects; (ii) both parties’ experts agreed that a site visit would not allow a visual inspection of the areas of the works concerned by TFM’s remaining two allegations of defective work; (iii) it was not reasonable or fair to adjourn the arbitration for an uncertain period, for the sole purpose of enabling TFM’s expert to conduct face-to-face interviews on site (rather than by videoconference or telephone); and (iv) TFM had failed to discharge its procedural and evidentiary burden of adducing any documentary evidence regarding any remedial works made necessary by the allegedly defective work and the cost of any remedial works.

In assessing whether the tribunal had breached section 33 by declining to adjourn the arbitration, Moulder J held that the tribunal had exercised its discretion “having regard to the evidence of the experts as to the utility of a site visit and weighed this evidence against the effect of an adjournment. There is no basis to conclude that this decision surmounted the high hurdle of a successful challenge under section 68 as being a conclusion which no reasonable arbitrator could have arrived at” (see [48]).

Moulder J’s judgment illustrates the high bar imposed by section 68(2)(a). The judgment reinforces the wide discretion given to London-seated arbitral tribunals in procedural and evidential matters. Any challenge to a tribunal’s discretionary procedural decisions will not succeed unless the applicant can show that the tribunal reached a decision which no reasonable arbitrator could have reached. This test illustrates the commitment of the English courts to the principle of non-intervention in procedural and evidential matters, save in very exceptional cases, of which the present case was not one.

Read the full judgment