P v D Arbitration Claims Under Section 68 And 33 Of The Arbitration Act 1996

By the time you read this the fateful day may well have passed (with or without a bong from Big Ben) and the UK will have left the EU. Brexit's effect on the desirability of England as a forum for the resolution of international disputes remains to be seen, (although English lawyers have on the whole been sanguine about it, pointing to London's prevailing status as a global centre of international arbitration and the sophistication and certainty conferred by the choice of English governing law).

In that context, the judgment of the English Commercial Court in P v D1 , an arbitration claim made under sections 68 and 33 of the Arbitration Act 1996 (the Act), is timely. The decision (which will not be appealed) highlights the consequences for parties if they fail to interrogate fully opponent witnesses on key points of evidence, and for Tribunals of issuing awards inconsistent with unchallenged evidence or predicated upon a case that has not been advanced.

The decision brings certainty that, in English-seated arbitrations, witness testimony must be followed unless demonstrably contradicted by cogent alternative evidence or undermined in cross-examination (in accordance with the long-established principles set out in Browne v Dunn2. It is not safe for parties or Tribunals simply to reject that evidence out of hand or to rely only on inconsistencies with the documentary record.

The Arbitration

P and D are parties to an offshore joint venture, through which they acquired shares in a West African listed energy company. The transaction was financed by US$730 million of loans made by D to P and to one of the joint venture companies, with short-term repayment dates.

P's case in the arbitration was that at meetings in August 2015 and November 2016, D orally agreed to postpone the repayment dates of the loans to 1 January 2018 and then to 1 January 2020, alternatively that D represented to P that it would not enforce repayment of the loans before those dates, giving rise to estoppels to that effect.

D denied that any oral agreement was made or that any estoppels were established. The key witnesses to the meetings in August 2015 and November 2016 were Mr E on behalf of P and Mr D on behalf of D.

At the hearing, P's principal, Mr E, to whom P alleged the representation giving rise to an estoppel as to the extension to 1 January 2020 was made at the August 2015 meeting by D's principal, was not cross-examined at all on his evidence of that meeting...