English courts provide guidance on the loss of the right to object under the Arbitration Law
A recent court decision in England held that an objection to the jurisdiction of the court must be raised immediately after the reasons exist, and the form of objection should be taken.
Judge Knowles of the High Court ruled that the plaintiff in Balochistan (Balochistan), Pakistan had not previously filed corruption charges as a reason to oppose the court’s jurisdiction in the International Trade Chamber arbitration proceedings (ICC). Therefore, the province has no right to invoke suspected corruption in judicial proceedings to challenge arbitration awards under the 1996 Arbitration Law (the law).
The decision provided some useful clarifications and clarified the exact requirements of the parties to maintain their right to challenge the arbitral award in the English courts. The court sought evidence to prove that the reason for the challenge had previously been independently submitted to the court and was sufficiently specific that both the court and the other party interpreted it as an objection. It is not enough to mention only how another court or arbitration tribunal handles objections and base it on the conclusion of that court, or merely mention the existence of the problem without explaining how it affects the process.
Therefore, the parties to the arbitration should investigate as soon as possible whether it is possible to raise objections, and once they fully understand the reasons for such objections, they should submit all the objections to the arbitration tribunal. Given the way the evidence was discovered throughout the process, the parties should periodically assess whether there are new reasons, and then raise an objection as soon as possible.
Balochistan’s right to object
The law gives a party to an arbitration award the right to challenge the award for certain limited reasons: the arbitral tribunal lacks substantive jurisdiction; there are serious violations that affect the court, the procedure, or the award; or the law enforcement is ineffective.
However, the right to challenge is severely restricted. This includes article 73 of the Law. According to this article, if a party continues to participate in the arbitration proceeding without raising an objection knowing that the relevant reason exists, one of the parties loses the right to object or the existence of the reason may be reasonable through the following diligent methods.
In 2014, the ICC arbitration tribunal ruled that the arbitration agreement is governed by English law and is therefore valid based on the principle of separability, which gives the arbitration tribunal jurisdiction to hear the demands of the TCC. This ruling was subsequently incorporated into a partial ruling in 2019.
Baluchistan attempted to challenge the ruling, in part because the arbitral tribunal had no jurisdiction because the JVA was invalid due to corruption. TCC argued that it was forbidden to do so under article 73 of the law because it did not raise corruption charges in ICC proceedings. Baluchistan rejected this, stating that throughout the ICC proceedings, it mentioned corruption, and both the TCC and the arbitration court resolved these issues.
The court rejected Balochistan's claims. Judge Knowles ruled that the state had lost the right to challenge the court's jurisdiction because it had not taken sufficient steps to bring corruption to court.
(This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, or Religion, Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre Foundation shall not be responsible for any errors caused due to human error or otherwise.)