This article was written by Dorothy Murray (partner), with acknowledgment to Enterprise Scheme participant and law student Felicia Hutapea.
An award made in an LCIA arbitration granted Xstrata Coal Queensland Pty Ltd, Sumisho Coal Australia Pty Ltd, Itochu Coal Resources Australia Pty Ltd, and ICRA OC Pty Ltd damages, which were to be paid by the Defendant, Benxi Iron & Steel (Group) International Economic & Trading Co Ltd. Claimants sought recognition and enforcement of the Award from the Shenyang Intermediate People’s Court in China where Defendant refused to pay claiming that one Claimant (ICRA OC) was not a party to the original contract and the arbitration agreement. The Court refused enforcement on this basis.
The Tribunal had treated ICRA OC as party to the contract, arbitration agreement and claim in front of it but the Award did not explain its reasoning in this regard. While Article 27 of the LCIA Rules 1998 allows a party to seek a correction to an award, the applicable 30 day time limit had long expired by the time enforcement was refused in the People’s Republic of China.
Claimants applied to the Commercial Court of England and Wales under s79 of the Arbitration Act 1996 for a retrospective extension of time to make an Article 27 application to the Tribunal. The Court granted the application, finding that Claimants should be allowed to clarify the ambiguity. The judge observed that the time limit under Article 27 of the LCIA Rules would almost always expire in cases where claimants seek recognition and enforcement of an award under the New York Convention, and refusing the application would result to substantial injustice.