Commercial Disputes Weekly – Issue 2047 May 2024

Jurisdiction
The Commercial Court has refused to grant an injunction against Malaysian court proceedings that were brought in breach of a London arbitration agreement. The dispute arose out of an agreement to store oil on Euronav’s vessel, which was terminated when the oil was discovered to be subject to US sanctions against Iran. The English arbitration agreement was contained in an addendum to the storage agreement. The cargo owner brought proceedings in Malaysia for unlawful conversion. Euronav commenced London arbitration. This led to the cargo owner seeking an anti-arbitration injunction from the Malaysian court and Euronav seeking a corresponding anti-anti-arbitration injunction from the English court. The English court refused the injunction for reasons of comity. Euronav had applied to strike out the Malaysian proceedings which had been held to be a voluntary submission to the jurisdiction. An appeal against that decision was pending. The court acknowledged that it was highly probable that Euronav would be able to prove the existence of a binding arbitration agreement between the parties. However, Euronav’s action in seeking the injunction was vexatious and oppressive where it had submitted to the jurisdiction and two levels of Malaysian judges were engaged. Refusing the injunction would also avoid additional costs and possible inconsistent decisions.
Euronav Shipping NV v Black Swan Petroleum DMCC [2024] EWHC 986 (Comm), 26 April 2024

Insurance – Covid 19
The Court of Appeal has dismissed an appeal in a further instalment of the impact of Covid 19 on businesses. A restaurant business had business interruption insurance cover that provided an indemnity for “interruption of or interference with the business caused by damage”. There had been no physical damage to the premises. The policy wording was unambiguous that cover would only be provided where there was physical damage. Although that did not necessarily make sense in relation to the Covid 19 outbreak, the policy had to be interpreted in the context of events at the time of inception in October 2019. Covid 19 was almost unheard of at that point. Although the clause only provided limited cover, this resulted no doubt from the fact that the insurer offered non-physical damage cover as add on cover for additional premium. Whilst frustrating for the claimant, that could not change the interpretation of the clause.
Bellini (N/E) Ltd v Brit UW Ltd [2024] EWCA Civ 435, 30 April 2024

Adjudication
The Technology and Construction Court has found that an adjudicator had incorrectly used the slip rule to change a matter of substance in his decision, rather than simply amending clerical errors. The contractor sought to enforce the earlier decision but the sub-contractor challenged this on the basis that the revised decision had superseded the earlier decision. The court refused because the revised decision had been made outside of the adjudicator’s jurisdiction. When the adjudicator asked for clerical or typographical errors, the correspondence from the sub-contractor’s solicitors went far beyond this and amounted to submissions on matters of fact. A clerical error is where a decision is written down wrongly. Here, the adjudicator had concluded, following the further submissions, that there was a matter of substance which had not been adequately addressed in the decision and amended the decision accordingly. This was not something he was entitled to do. He was only able to remove a clerical or typographical error that had arisen by accident or omission.
McLaughlin and Harvey Ltd v LJJ Ltd [2024] EWHC 1032 (TCC), 2 May 2024

Arbitration
The Commercial Court has rejected a challenge to an arbitration award under section 68 of the Arbitration Act 1996, reminding parties of the significant hurdle that must be overcome for such a challenge to succeed. After the hearing and before producing its award, the tribunal requested additional documents from the parties in relation to liability and flagged that it may decide to appoint an expert in relation to quantum. It did not do that and delivered its award on both liability and quantum. The losing party, GOK, submitted that the tribunal had not acted fairly in deciding on quantum because its order had created an expectation that either it would dismiss the damages claim, appoint an expert or request further evidence from the parties. It had done none of those. The court disagreed with this interpretation of the order. Further, GOK had failed to show that but for the alleged irregularity, the outcome of the arbitration might well have been different. This was an essential part of the test for proving substantial injustice.
Republic of Kosovo v ContourGlobal Kosovo LLC [2024] EWHC 877 (Comm), 15 April 2024

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams: