A new era for Whistleblowers in Australia
Amendments to the laws have passed both Commonwealth Houses of Parliament.
In the recent decision of Atlas Power v National Transmission and Despatch Company Ltd  EWHC 1052, the English High Court granted an anti-suit injunction restraining the national grid company of Pakistan (NTDC) from challenging an LCIA Partial Final Award outside of the courts of England and Wales. A group of Pakistani independent power producers (the IPPs) sought the anti-suit injunction on the basis that the LCIA arbitration was London seated and that the English courts therefore held exclusive supervisory jurisdiction over the arbitrations.
The underlying dispute concerned sums owed by NTDC to the IPPs in respect of nine Pakistani law governed power purchase agreements (the PPAs) entered into between 2006 and 2008. Initially, the parties referred the dispute to an expert determination process, which concluded with a determination that NTDC was liable to pay various sums owed to the IPPs (the Determination).
The Government of Pakistan obtained an injunction from the courts of Pakistan restricting either party from acting upon the Declaration and an order pronouncing the Declaration null, void and illegal.
Each of the IPPs had previously commenced LCIA arbitration proceedings against NTDC which were stayed pending conclusion of the expert determination process. As a result of the injunction, however, the IPPs sought to recommence these arbitration proceedings on the basis that the Determination was final and binding and that NDTC was required to pay the specified sums.
The PPAs contained arbitration agreements with the following material provisions:
The IPPs nominated a London seat for the arbitration on the basis that the value of the dispute exceeded four million dollars. In its Responses, NTDC countered this interpretation with an argument that, the IPPs were only entitled to select London as the venue rather than the seat of the arbitration as the seat for all arbitrations was Lahore, Pakistan. The IPPs refuted this argument, stating that if NTDC’s interpretation were correct, the parties had not agreed a seat at all. In that case, the seat would fall to be determined in accordance with the LCIA Rules. The rules provide that in the absence of any agreement between the parties, the seat of the arbitration shall be London unless otherwise determined by the LCIA Court.
The LCIA Court determined that the seat of the arbitrations would be London. A sole arbitrator was appointed and the arbitrations consolidated by consent into a single set of proceedings. On 8 June 2017, the arbitrator issued a final award (the Partial Final Award) which ruled that:
In July 2017, NTDC applied to the courts of Pakistan for an order to set aside the Partial Final Award. In response, the IPPs filed an application in the English High Court for an anti-suit injunction to prevent NTDC from challenging the Partial Final Award in any jurisdiction other than England and Wales.
The High Court was to determine whether (1) the parties had validly and lawfully chosen London as the seat of the arbitration; and (2) the English courts had exclusive supervisory jurisdiction over the arbitration proceedings.
NTDC put forward two alternative arguments against the anti-suit injunction. Firstly, that the law of Pakistan prevents parties from excluding the supervisory jurisdiction of the court of Pakistan in relation to Pakistani law governed contracts. On this basis, the courts of Pakistan should have at least concurrent jurisdiction. Alternatively, if there could only be one supervisory jurisdiction then this must be the courts of Pakistan. It maintained that the choice of London seat was invalid under the laws of Pakistan.
Neither of these arguments was successful. Firstly, the High Court confirmed that the seat of the arbitration was London, as per the LCIA Court’s decision, and held that NTDC was out of time to contest jurisdiction. Secondly, the High Court found that the English courts had exclusive supervisory jurisdiction over the LCIA arbitration proceedings. The IPPs relied on the decision in C v D  1 Lloyd’s Rep 239 which established that the choice of seat determines the law governing the arbitration proceedings (the “curial law”), including any challenges to the award. The High Court confirmed that an agreement as to the seat of an arbitration is analogous to an exclusive jurisdiction clause in favour of the courts of that same jurisdiction. Allowing concurrent supervisory jurisdiction as proposed by NTDC would be unsatisfactory as this might allow challenges to an award in two jurisdictions.
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.
Amendments to the laws have passed both Commonwealth Houses of Parliament.
Canadian National Railway Company v BNSF Railway Company adds to recent case law that has seen the Federal Court refuse to issue routine protective orders.