Dispute Resolution Archive

Final Judgment:

We send out a regular email update sharing our views on particular legal developments and trends that impact on dispute resolution.  

• Referring to legal advice in evidence: a word of caution - Giving witness evidence is an unenviable task.  Amongst the myriad of issues that a witness has to keep in mind when preparing his evidence, and dealing with cross examination, is the need to avoid inadvertent waiver of privilege over all of the confidential legal advice he has received.  A recent application in Ackerman v Ackerman [2011] EWHC 3428 (Ch) (in which BLP acted for the Defendant) provides a salutary reminder of this risk.  However it also offers some reassurance that a witness is unlikely to waive privilege simply by making a passing reference to the fact that advice was sought.  Read more >   
• Disaster Recovery: What happens to your contracts if the Euro fails? - Despite repeated assurances by Europe’s political leaders to the contrary, there is a growing fear that the euro cannot be sustained in its current form.  The potential political, economic, and logistical turmoil has been the subject of much discussion in recent days.  However, the possible legal implications remain largely unexplored.  This edition of Final Judgment considers what might happen to English law contracts which provide for payment in euros, should the euro undergo substantial reform or cease to exist.  Read more > 
• Agreeing to disagree? - All too often parties find themselves disagreeing over whether the written contract between them reflects their respective true intentions.  In Daventry v Daventry, the Court of Appeal resolved such a dispute by allowing rectification of the disputed contract, with the alarming consequence that the defendant was liable to meet a pension deficit of £2.4m - a liability which the defendant had no intention to accept when the contract was signed (and did not have the funding to meet).  Read more > 
• Protecting employees' identities from disclosure - The Court of Appeal's decision in Shah v HSBC provides helpful guidance as to when such redactions may be permissable, and should encourage litigants take a more robust approach to redacting irrelevant material.  In the specific context of bank staff reporting money laundering suspicions, the judgment provides comfort that a their identity is unlikely to be considered relevant so as to justify disclosure, and/or such disclosure would not be in the public interest.  Read more > 
• A privilege shared - When dealing with privileged documents, it is always necessary to consider to whom that privilege belongs.  Particular challenges arise when the privilege belongs to more than one party (joint privilege), and the case of Ford v FSA provides useful guidance on how to avoid falling foul of the rules in such situations.  Read more > 
• FSA presses for wider powers of redress in cases of misconduct and mis-selling - The FSA has asked Parliament to consider adopting a radically different approach to consumer redress under the new regulatory system.  This could require firms to pay compensation even where a breach of regulatory duties by the firm has not caused consumers to suffer any loss. Read more > 
• Don't panic! Sanity prevails in Jivraj (but was it really worth all that fuss?): In Jivraj v Hashwani the Supreme Court held that arbitrators are not employees and are not subject to anti-discrimination legislation.  But is the ability to specify an arbitrator’s religion or nationality really fundamental to arbitration?  Read more >
• Imminent Changes to FSA Complaint-Handling Rules: The FSA recently published its final rules relating to changes to complaint-handling, and increased the Ombudsman award limit. These rule changes start to take effect from 1 September and firms therefore need to review processes and procedures over the coming weeks.  Read more > 
• Arbitral Tribunals can decide Shareholders' Unfair Prejudice Disputes: The Court of Appeal has held that there is no rule of public policy which has the effect of rendering an arbitration agreement void and/or unenforceable insofar as it purports to bind the parties to refer to arbitration the determination of issues that would arise in an unfair prejudice petition under the Companies Act.  Read more >
• Variety is the key to arbitrator nominations: In deciding whether an arbitrator was impartial and independent, an ICSID tribunal has taken into account the fact that the arbitrator had been appointed several times before by one party and their counsel.  This is a departure from an earlier ICSID decision, and is likely to impact decision making in respect of all forms of international arbitration.  Read more > 
• Attack the trust: The Privy Council has held that the courts can appoint a receiver over a power of revocation in a trust.  That power can then be used to access the trust assets and satisfy a judgment debt.  This genuinely groundbreaking decision gives judgment creditors a means of getting at assets which their debtors have tried to put beyond their reach.  Read more > 
• Time to mediate? - The EU Mediation Directive came into effect on 20 May. It encourages parties in cross-border disputes to mediate, and makes it easier to enforce a mediated settlement.  Read more >
• Eurosail 3BL: The Balance Sheet Test - The Court of Appeal’s recent decision in BNY v Eurosail 3BL is groundbreaking not only for the securitisation industry, but also for any business facing a possible challenge to its solvency.  It provides invaluable clarification and guidance on the balance sheet test for insolvency.  This should reduce the likelihood of disputes arising with business partners who might stand to benefit in an insolvency situation.  Read more >
• West Tankers revisited: The "Italian Torpedo" Torpedoed - The High Court has managed to effectively “sidestep” the European Court of Justice’s controversial 2009 decision in the West Tankers litigation, by allowing the claimant to enforce an award obtained in parallel arbitral proceedings.  The High Court’s decision provides a helpful interim solution to the infamous “Italian Torpedo”.  This will help to promote arbitration within the EU, pending a more satisfactory and permanent solution through a review of the Brussels Regulation.  Read more >
• The Bribery Act 2010: Ministry of Justice guidance offers comfort to UK plc - On 30 March the Ministry of Justice finally published its guidance on “adequate procedures” under the Bribery Act.  The guidance endorses a risk-based approach and should provide significant comfort to UK businesses on issues such as corporate hospitality and dealings with Foreign Public Officials. Clients are urged to ignore the scaremongering in the press (and elsewhere) and focus their anti-bribery efforts on high risk areas.  Read more > 
• The Italian Torpedo Disarmed? - The European Commission is proposing to amend the Brussels Regulation, to reduce the scope for avoiding arbitration by commencing court proceedings in breach of an arbitration agreement. This is a welcome boost to those involved with international contracts. The proposals would reinstate one of arbitration's main advantages: access to speedy justice outside of a judicial system.  Read more >  

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Our views:

• Amendment to the International Chamber of Commerce Rules of International Arbitration: The International Chamber of Commerce has issued a revised set of rules for International Arbitration, due to come into force from 1 January 2012. Read more >
• Jivraj: Sanity Prevails - On 27 July, the Supreme Court overturned the Court of Appeal’s decision in Nurdin Jivraj v Sadruddin Hashwani, holding that arbitrators are not “employees” for the purposes of Equality Act 2010 and therefore anti-discrimination legislation does not apply to the appointment of arbitrators. Read more >
• Public Interest Immunity recognised for Bank employees who Report Suspicions to the Serious Organised Crime Agency - The decision of The Honourable Mr Justice Coulson in Shah and Another v HSBC Private Bank on the 4 July 2011 [2011] EWHC 1713 (QB) will be welcome news for bank staff who report suspicions of money laundering to the Money Laundering Reporting Officer. Read more > 
• Turning the Tanker around - The European Commission has published a proposal to amend the Brussels Regulation on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (EC 44/2001). The Proposal aims to reduce the potential for a party to delay or avoid arbitration by bringing proceedings in another member state, in breach of a valid arbitration agreement.  Read more > 
• Implementation of the Jackson Reforms - will this be the end of CFAs? - On 29^th March 2011, the Government published its response to the Jackson Consultation announcing that it intends to implement the majority of the Jackson reforms on civil litigation costs, through a series of changes to primary legislation and the Civil Procedure Rules “as soon as Parliamentary time allows”.  To find out what this means for your litigation:  Read more > 
• Will expert witnesses be willing to give evidence?  On 30 March, the Supreme Court handed down a landmark judgment, ruling that expert witnesses are longer immune from being sued for negligence. (Jones v Kaney [2011] UKSC 13).The ruling means that experts providing advice on cases are now liable if their advice given in evidence is deemed negligent, removing the immunity from suit for breach of duty.  Read more >
• The First Claim -  Richard Power reports on the case of Kotonou v National Westminster Bank plc, and weighs up its impact. Read more >
• Jackson report on Civil Litigation costs - Clare Semple outlines the key recommendations in Lord Justice Jackson's final report on civil litigation costs.  Read more >    

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Corporate and Commercial Disputes

• Leniency and Disclosure - Ed Coulson writes for the Competition Law Insight regarding the Pfleiderer decision.  Read more >

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Corporate Investigations

• Managing in a Public Relations Crisis - How to manage your business through the eye of the public relations storm.  Read more >
• Bribery and corruption update - Aaron Stephens reviews the Law Commission recommendations arising out of its “Reforming Bribery” consultation and looks at how the SFO has been reforming the way it investigates and prosecutes both domestic and international bribery.  Read more >
• Bribery and corruption investigations - Segun Osuntokun and Aaron Stephens look at enforcement of anti-bribery legislation and what companies can do to manage their exposure.  Read more >

 

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Financial Crime

PLC Financial Crime column

We share our views on topical financial crime issues with PLC Financial Services every two months.

In our financial crime column for February 2012, we consider:

• The Serious Fraud Office's (SFO) recent civil recovery action to claw back dividends received by Mabey Engineering (Holdings) Ltd.
• The FSA's enforcement action for insider dealing against David Einhorn, Greenlight Capital Inc and others.
• Deferred prosecution agreements in the UK.

Read more

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Financial Services & Markets

• Public interest immunity recognised for bank employees who report suspicions of money laundering - The decision of The Honourable Mr Justice Coulson in Shah and Another v HSBC Private Bank on the 4 July 2011 [2011] EWHC 1713 (QB) will be welcome news for bank staff who report suspicions of money laundering to the Money Laundering Reporting Officer. Read more >  
• Bribery Act 2010 - In this practice note, Aaron Stephens, a senior associate in BLP's Financial Services Investigations and Enforcement practice, and Daren Allen, a partner in the same practice, consider the implications that the Bribery Act 2010 will have for banks and other financial institutions (including insurance firms, asset management firms, hedge funds and private equity houses), and the practical steps firms should take to prepare for the new regime. Read more >
  (Reproduced from ^PLCFinancial Services with the permission of the publishers. For further information visit www.practicallaw.com or call 020 7202 1200)
• Product intervention - how far will the FSA go ? - Jacob Ghanty considers the FSA proposals in DP11/1 and examines key issues for firms. Read more >
• MiFID Review - Jacob Ghanty looks at the key points arising from the European Commission's MiFID Review and the possible implications for clients.  Read more >
• Tackling fragmentation risk in the new regulatory architecture - Nathan Willmott explains the practical implications of the Government’s overhaul of the UK regulatory architecture, and identifies 10 key issues that will need to be addressed if the new regime is to operate effectively.  Read more >
• Living Wills: An Overview - Here we summarise the impact for clients, which, under The Financial Services Act 2010, are required to prepare recovery and resolution plans (commonly known as a living will). Read more >
• FSA CP 10/09 - Enhancing the Client Assets Sourcebook - Jonathan Marsh considers how the FSA's proposals on strengthening the client assets regime might affect clients.  Read more >

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Insurance/Reinsurance

• The Sanctity of ... English Arbitration Awards - Reinsurance arbitrations - Jonathan Sacher and David Parker consider the English court's continuing support for arbitration, by insisting that decisions of arbitrators appointed under reinsurance contracts are to be upheld.  Read more > 
• Regulatory duties in handling commercial insurance claims - Once the banking sector is back on its feet, will the FSA’s next area of focus in the insurance sector be improving standards in commercial insurance claims-handling? (Kelly Evans)  (This article was originally published in the January 2010 edition of the Chartered Insurance Institute Journal Xpress.  Read more > 
• Arbitrators discretion when seeking a fair outcome to a dispute - “Honourable engagement” clauses have been used in contracts for many centuries. There are, however, real questions over whether honourable engagement clauses are enforceable.  Read more >

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International Arbitration

• Tedcom Finance Limited and Anor v Vetabet Holdings Limited and Others - The Court of Appeal last month (24 February 2011) paved the way, in principle, for claimants to issue and serve proceedings on third parties outside the jurisdiction under section 44 of the English Arbitration Act 1996 (the “1996 Act”).  Read more >  
• Limited Appeal - The finality of arbitral awards is often regarded as one of the key advantages of arbitration in comparison to litigation. The uncertainty that has surrounded the right to appeal arbitral awards in England has been resolved in the recent case of Guangzhou Dockyards Co. Ltd. v. E.N.E. Aegiali  when the High Court determined that no appeal on a point of fact lies to the court; and, moreover, it is highly doubtful that the parties could even agree to confer jurisdiction on the courts to hear an appeal on a point of fact. This article looks at what this means for your arbitration agreement.  Read more >
• Strategies for enforcing London Arbitration Clauses - Recent decisions such as West Tankers, The Wadi Sudr and CMA CGM v Hyundai Mipo Dockyard Co have muddied the waters in Europe on the enforceability of arbitration agreements and the ability to enforce such agreements through the use of anti-suit injunctions. The impact of these decisions and the steps that can and should be taken to protect and enforce an arbitration agreement formed the basis of our recent International Arbitration co-hosted with PLC on 7 December 2010. Our detailed legal update from the event sets out strategies for avoiding the problems created by those decisions so as to protect your arbitration agreement. Read more >
• The Jivraj effect: London's future as a leading arbitration centre - This blog looks at the Court of Appeal’s decision in Nurdin Jivraj v Sadruddin Hashwani which  could have the unexpected consequence of rendering a vast number of arbitration clauses void, thereby undermining London as an international arbitration centre.  Read more >
• Validity of arbitration clause stipulating tribunal to be drawn from members of a particular religious group - This issue was considered recently by the Court of Appeal in Sadruddin Hashwani v Nurdin JivraJ.  Read more >
• How strictly will a provision about address for service of a notice of arbitration be interpreted? - This issue was addressed in Anglian Water Services v Laing O’Rourke.  Read more >
• Challenge to Arbitration award on basis of failure to apply chosen governing law - in B v A the court considered such a challenge and held that a conscious disregard of the provisions of the chosen law is a necessary but not a sufficient requirement.  Read more >   

Kluwer Reports:

As part of his role as rapporteur for England and Wales for Kluwer ITA (Institution for Transnational Arbitration), Nic Fletcher and his team produce bi-monthly summaries of English court judgments covering latest developments in international arbitration.

• Mobile Telesystems Finance SA v Nomihold - Paying noteholders is in the ordinary course of business for the purpose of the exception under s.66(2) Abritration Act 1996.  Read more > 
• Sovarex v Alvarez - Enforcement proceedings under section 66 Arbitration Act 1996 should not be derailed by reason of competing Regulation proceedings in another Member State.  Read more >
• Michael Wilson & Partners v John Forster Emmott - the courts will seek to uphold arbitration awards wherever possible.  Read more >
• States of Guernsey v Jacobs UK Limited: Dispute in relation to whether or not an arbitration agreement had been entered into between the parties. Read more >
• Milan Nigeria Limited: Challenge to an Arbitration award in relation to the currency of the Award. Read more >
• John Milsom and others v Mukhtar Ablyazov: Application for production of documents under section 44 of the Arbitration Act 1996. Read more >
• Rotenberg v Sucafina: The court considers whether interim awards are final and binding. Read more >
• West Tankers Inc v Allianz SpA and another: Application under section 66 of the Arbitration Act 1996 to establish the primacy of a declaratory award over an inconsistent judgment. Read more >
• JSC BTA Bank v Mukhtar Ablyazov: Application to stay court proceedings where the respondent alleges that the agreement containing the agreement to arbitrate was not valid and binding. Read more >
• B v S: Challenge to an injunction on the basis of a Scott v Avery clause preventing any legal proceedings until an award had been issued. Read more >
• Telenor East Holding II AS v Altimo Holdings & Investments Ltd: Application in terms of section 44 of the Arbitration Act 1996 for an interim injunction restraining the respondent from issuing shares. Read more >
• Nanjing Tianshun Shipbuilding Co Ltd v Orchard Tankers PTE Ltd: Challenge to arbitration proceedings on the basis of a failure to commence the arbitration within a prescribed period. Read more >
• Cosco Bulk Carrier Co Ltd v Armada Shipping SA and another: Application to permit arbitration proceedings which would otherwise be stayed by Section 130(2) of the Insolvency Act 1986. Read more >
• X v Y: Challenge to an arbitrator’s decision regarding the construction of a time bar clause. Read more >
• Ispat Industries Ltd v Western Bulk Pte Ltd: Challenge to an Arbitration award on the basis of the arbitrator’s failure to consider all concerns raised by a dissenting arbitrator. Read more >
• Novasen SA v Alimenta SA: Challenge to arbitration proceedings on the basis that an undisclosed principal was not a party to the contract or to the arbitration agreement. Read more > 
• A v B: Application for the amount awarded in an arbitration award to be secured by the party challenging the jurisdiction of the tribunal. Read more > 
• Claxton Engineering Services Limited v TXM Ola-Es Gazkutato KFT: Application for a stay of proceedings opposed on the basis that there was no arbitration agreement between the parties. Read more >
• Noble Denton Middle East and Another v Noble Denton International Ltd: Application to stay the arbitration on the basis that parallel proceedings were pending in another state. Read more > 

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Real Estate Disputes:

• Dilapidations Protocol - As from 1 January 2012, the dilapidations protocol will form part of the Civil Procedure Rules, regulating the conduct of dilapidations claims. Our briefing sets out what this means for landlords and tenants involved in such claims.  Read more >
• Riot (Damages) Act -  Following the August 2011 disturbances, and consequential property damage, our advice has been sought as to insurance and compensation.  Read more >
• Government needs more grit and less gloss to tackle law reforms - The Law Commission works assiduously to recommend improvements to our laws. Now we need the government to act. (First published in Property Week) Read more > 
• Making administrators pay for disrepair - Landlords can take measures to ensure administrators take responsibility for repairs during their retention of leasehold properties, says Jeremy Stephen. (First published in the Estates Gazette)  Read more > 
• Fishing from a jetty? Relevance and disclosure in property disputes - A hypothetical transaction lies at the heart of most valuation exercises. An issue that presents itself is whether documents and information held by one party but not the other are relevant and ought to be disclosed to that other. The question is then turned round and the party against whom disclosure is sought asks: 'How can these documents or information be relevant if they were not known to you?' Battle is joined. Read more >   
• Rights of Light - The Heaney case has been described by one leading rights of light surveyor as the '9/11' of the rights of light world. Heaney has indeed dramatically changed the way in which owner-occupiers, developers, surveyors, insurance companies - and perhaps, more importantly, funders and prospective tenants of a proposed development - view the risks associated with potential rights of light infringements. So what's it all about?  Read more >
• Heaney case settles - appeal against the 2010 rights of light decision in HKRUK II (CUC) v Heaney withdrawn.  Read more >
• Revoking a voluntary arrangement for unfair prejudice - Company Voluntary Arrangements (CVAs) are headline news once again. On 22 March 2011 JJB's creditors approved a CVA which will forcibly close as many as 89 sites with rent being cut to 50% until they are closed. Other major property occupiers, including HMV and Southern Cross, are showing signs of distress and have appointed accountancy firms to advise on their options. One of these options will be a CVA. Once approved a CVA can only be successfully challenged if it is unfairly prejudicial. Knowing what this means is an important part in assessing any CVA proposal. In this note, Michael Metliss considers what constitutes "unfair prejudice" in the context of a CVA.  Read more > 
• Hot air - The CRC Efficient Energy Scheme is slightly simplified by regulations that come into force on 1 April 2011.  Read more >