Interim and emergency measures

This Overview provides an outline of the interim and emergency measures subtopic covering interim and emergency measures to support arbitration available within England and Wales under the Arbitration Act 1996 (AA 1996). The Overview provides links to the relevant Practice Notes covering freezing injunctions, emergency relief and how to apply to the courts for the emergency relief, and peremptory orders.

Emergency relief in, or in support of, arbitration under the AA 1996 in England and Wales—tribunal or court?

This Practice Note sets out the powers given to the tribunal under AA 1996 to order interim or emergency relief to support an arbitration. The tribunal’s powers are best seen alongside the court’s powers in order for practitioners to choose how best to protect their clients.

For more information, see Practice Note: AA 1996—interim and/or emergency relief—tribunal or court?

Emergency relief in arbitration—applying to the tribunal under

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Hong Kong Court refuses stay in favour of arbitration where settlement agreement disapplies arbitration clause in original contract (Kat Yue Construction v Fai Lee Construction)

Arbitration analysis: In Kat Yue Construction v Fai Lee Construction, the Hong Kong Court of First Instance refused leave to appeal against a decision declining to stay court proceedings in favour of arbitration. The dispute arose from a construction contract which contained an arbitration clause. The parties settled the initial dispute by entering into a Settlement Agreement that expressly provided that the arbitration clause ‘shall not apply’. When further disputes arose under the Settlement Agreement, the defendant applied to stay the proceedings in favour of arbitration, arguing that the plaintiff’s damages were based on the original contract and therefore fell within the arbitration clause. The court refused a stay and subsequently refused leave to appeal. The court held that the Settlement Agreement, rather than the original contract, was the ‘centre of gravity’ of the dispute. Although damages were assessed by reference to the original contract, the plaintiff’s right to relief depended on establishing a breach of the Settlement Agreement—which the court characterised as a ‘condition precedent’ to recovery. The court further noted that requiring arbitration would render the express exclusion clause otiose and lead to ‘fragmentation’ of proceedings. This decision illustrates that where related agreements contain conflicting dispute resolution regimes, the court will adopt the regime governing the agreement at the ‘centre of gravity’ of the dispute. It reinforces the principle that courts will not strain to bring disputes within an arbitration clause where parties have expressly agreed otherwise. Written by Paul Starr, partner, and John Law, associate, at King & Wood Mallesons.

Section 69 appeal—court clarifies scope of repudiation compensation (Olam Global Agri Pte Ltd v Holbud Ltd)

Arbitration analysis: This decision concerns Olam Global Agri Pte Ltd’s (Seller or Olam) section 69 appeal under the Arbitration Act 1996 (the ‘Act’) against a Grain and Feed Trade Association (GAFTA) Board of Appeal (BOA) award (BOA Award) in favour of Holbud Ltd (Buyer or ‘Holbud’) arising out of a GAFTA 49 FOB sale contract dated 19 November 2021 (the ‘Contract’). The appeal raised two issues: (a) whether an innocent party must prove its own ability to perform its contractual obligations in order to recover substantial damages where the counterparty has repudiated the contract by wrongly declaring force majeure; and (b) whether Clause 6 of GAFTA 49 (‘Clause 6’) permits a substitute vessel to be nominated at any time before the innocent party accepts that repudiation. In setting aside the BOA Award, the Commercial Court held that a wrongful force majeure notice does not, without more, relieve the Buyer of the need to prove it could have performed its own obligations to recover substantial damages. The court also found that Clause 6 does not permit substitution of a nominated vessel outside the clause’s strict timing requirements. Holbud’s claim for substantial damages therefore failed. The case underscores the corrective function of section 69 of the Act (‘Section 69’) and provides important guidance on the application of the compensatory principle in assessing damages following repudiatory breach. Written by Dr Ademola Bamgbose, solicitor advocate and senior associate at Hogan Lovells, London and Sofie Gowran, trainee solicitor at Hogan Lovells, London.

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