1MDB v IPIC and KABAB-I SAL v Kout Food Group cases nominated for most important decision award at 2020 GAR awards

13 March, 2020

Two cases involving members from Essex Court Chambers have been nominated for the Most Important Decision Award at the upcoming GAR Awards 2020.

The Court of Appeal’s decision in Minister of Finance (Incorporated) & 1Malaysia Development Berhad v International Petroleum Investment Company & Aabar Investments PJS, in which Eversheds Sutherland instructed Toby Landau QC, Peter Webster and Joseph Sullivan to act for the successful appellants, has been nominated for the Most Important Decision award at this year’s GAR awards.

In 1MDB v IPIC, the judgment contains an important analysis of the role of the English Courts as the supervisory courts of an English seated arbitration.

The case arises out of the well-known 1MDB scandal, concerning allegations that a multi-billion-dollar fraud was carried out against 1MDB, a Malaysian state-owned investment fund. 1MDB has applied to the English Courts to set aside a consent award on the grounds of lack of jurisdiction and fraud, implicating the former Prime Minister of Malaysia, who is now subject to a criminal trial.  Reversing the decision at first instance, the Court of Appeal lifted a stay on the English proceedings and granted the claimants’ application for an anti-arbitration injunction to restrain the pursuit of other arbitration proceedings until the application to set aside the consent award has been determined.

Toby Landau QC and Peter Webster along with Mr Joseph Sullivan were instructed by partners Richard Little and Jonathan Leach, and associates Michael Armstrong and Dan Younger at Eversheds Sutherland, for the appellants.

See the full judgment here

In Kabab-I SAL (Lebanon) v Kout Food Group (Kuwait), the Respondent successfully resisted recognition and enforcement of a Majority ICC Award (seated in Paris) under the New York Convention on jurisdictional grounds.  The Majority Tribunal determined that French law applied to the question of whether the Respondent had become a party to the arbitration agreement and substantive contract and that it had done so by conduct, notwithstanding the No Oral Modification provisions in the contract, on the basis of the application of UNIDROIT principles.  The Court of Appeal (upholding the first instance decision) rejected the Majority Award concluding that on the proper interpretation of the contract, English law applied to the arbitration agreement, that the No Oral Modification Provisions of the contract could not be circumvented save where there was an unequivocal representation and that UNIDTROIT principles stood for no different proposition and could not in any event alter the strict wording of the agreement.  The Court also refused an adjournment in favour of French annulment proceedings having determined that English law applied and that there was no realistic prospect of success as a matter of English law, since a French Court judgment could have no possible impact on the conclusions reached under the New York Convention.

In reaching these conclusions, the judgment clarifies the interpretative approach to be applied for determining whether there has been an express choice of law to govern the arbitration agreement finding as a matter of construction, that the law governing the main contractual agreement applied to the arbitration agreement. In this context, the Court of Appeal specifically rejected the notion that separability can relied upon to divorce the arbitration agreement from the main agreement for interpretative purposes. See our news item regarding this judgment here.

Ricky Diwan QC appeared for the Respondent, instructed by Jeremy Drew of RPC LLP.

See the full judgment here.

The 10th Annual GAR Awards Ceremony will take place on Thursday, 2 April during Paris Arbitration Week.