Reed Smith Client Alerts

The English Commercial Court has recently clarified the interpretation of time limits under the LCIA Rules 2014 for a party to bring an objection to the substantive jurisdiction of an arbitral tribunal.

Where a party has an objection to jurisdiction at the outset of the proceedings, it has until the time for filing its statement of defence to raise its objection.

The court also confirmed that, under the LCIA Rules 2014, potential claimants cannot bring claims in respect of multiple arbitration agreements under one request for arbitration. Where claimants attempt to do so, the request will be invalid and no arbitration will have been commenced.

The decision provides certainty in relation to when parties involved in an LCIA arbitration can exercise the fundamental right of objecting to a tribunal’s jurisdiction. It also underlines the importance of complying with any particular procedural requirements in commencing arbitral proceedings, as failure to do so can have very serious consequences for the defaulting party.

The full judgment can be found at A v. B [2017] EWHC 3417.

Authors: Gautam Bhattacharyya Christopher D. Wheatley

Type: Client Alerts

Background

The defendant, ‘B’, sold two consignments of crude oil to the claimant, ‘A’, under two separate contracts. Each contract was governed by English law and contained an LCIA arbitration clause.

B claimed that A failed to pay the purchase price. On 23 September 2016, B submitted a single request for arbitration in respect of both contracts (the Request) and paid a single filing fee.

On 31 October 2016, A served its response to the Request (the Response) (1) denying liability, (2) stating that the Response should not be construed as submission to jurisdiction and (3) reserving A’s rights to challenge the jurisdiction of any LCIA tribunal.