Atlas Power highlights the importance of parties setting out clearly their choice of seat in their arbitration agreements. This is especially significant where the choice of seat differs from the law of the contract, the choice of venue, or the default seat contained in the relevant institutional rules. The drafting of the arbitration agreement in this case was arguably unduly complex and should have been simplified. The wording was as follows:
"(a) Any Dispute arising out of or in connection with this Agreement that has not been resolved [under 18.1 or 18.2] shall be settled by arbitration in accordance with the London Court of International Arbitration, as in effect on the date of this Agreement (the "Rules"), by one (1) arbitrator appointed in accordance with the Rules. The arbitration proceedings shall be conducted, and the award shall be rendered, in the English language.
(c) the arbitration shall be conducted in Lahore, Pakistan; provided, however, that if the amount in Dispute is greater than 4 million Dollars ($4,000,000/-) or the amount of such Dispute together with the amount of all previous Disputes submitted for arbitration pursuant to this Section 18.3 exceeds six million Dollars ($6,000,000/-) or an issue in Dispute is (i) the legality, validity or enforceability of this Agreement or any material provision hereof, or (ii) the termination of this Agreement, then either Party may, unless otherwise agreed by the Parties, require that the arbitration be conducted in London, in which case the arbitration shall be conducted in London.…Notwithstanding the foregoing, either Party may require that arbitration of any Dispute be conducted in London (or such other location outside Pakistan as agreed by the Parties), in which case the arbitration shall be conducted in London (or such other location outside Pakistan as agreed by the parties): provided, however, that if the Dispute is not of a type that could have been conducted in London (or such other location outside Pakistan agreed by the parties) in accordance with the provisions of the foregoing sentence, the Party requiring that arbitration be conducted in London (or such other location outside Pakistan agreed by the parties) shall pay all costs of arbitration as and when incurred by the other Party (including out-of-pocket costs but excluding any award made by the arbitrator) in excess of the cost that would have been otherwise incurred by such other Party had the arbitration be conducted in Lahore, Pakistan… "
The option to choose between London or Lahore on the basis of the volume of the claim was likely driven by cost concerns for arbitration of small matters outside of Pakistan. The cost of arbitration compared to the value of the dispute will often be of concern to parties and in those circumstances bespoke provisions that provide options for parties to vary the seat of the arbitration depending on the value or type of claim may be appropriate. Clearer drafting in Atlas Power, i.e. by explicitly referring to “seat” rather than “shall be conducted”, may have circumvented the dispute between seat and venue.
The High Court’s decision in Atlas Power also indicates the unsympathetic approach the courts are likely to take in relation to out-of-time contests to jurisdiction. The fate of NTDC should be a warning to parties to bring any contest to jurisdiction in a prompt and timely manner.
Finally, Atlas Power is another example of recent cases where the English courts have exercised their supervisory powers under the Arbitration Act 1996, in line with the decision in C v D. It is positive that parties can continue to rely upon the exclusive supervisory jurisdiction of the English courts in respect of London seated arbitrations.