The seat of arbitration is a vital aspect of any arbitration proceeding. The situs is not just about where an institution is based, where hearings will be held or where there may be a good pool of arbitrators. It is also about which courts have supervisory power over your arbitration and the scope of those powers. A recent decision of the Commercial Court reminds us that although the governing law of an agreement may provide for one national law, which may follow the nationality of one or both parties, it is the seat of the arbitration which is crucial to the protection of an arbitral award and its enforceability.

Atlas Power v National Transmission

In Atlas Power v National Transmission Mr Justice Phillips heard an application in the Commercial Court for a final anti-suit injunction to restrain the defendant from challenging a Partial Final Award made in an LCIA arbitration. In ordering the final injunction, Phillips J confirmed that the seat of the arbitration in question was London and this entitled the claimant to permanently restrain the defendant from challenging the Final Partial Award in Lahore, Pakistan or anywhere other than England & Wales. (Atlas Power v National Transmission [2018] EWHC 1052 (Comm))

Background

The claimants were a group of independent power producers (IPPs) generating and supplying energy solely to the defendant, National Transmission and Despatch Company Limited (NTDC), a company registered in Pakistan and owned by the government of Pakistan. The IPPs entered into nine power purchasing agreements (PPAs) with NTDC. The PPAs were subject to Pakistani law and provided, in a somewhat complex arbitration agreement, for tiered dispute resolution by mutual discussions, expert determination and arbitration. The arbitration clause provided for Lahore, Pakistan as the situs in general, but under certain circumstances, the arbitration clause provided that the arbitration would be conducted in London, England.

A dispute arose which was determined in the IPPs’ favour by expert determination. NTDC challenged the determination in the Lahore court and obtained an injunction preventing any reliance by the parties on that determination. While the expert’s determination had been pending, the IPPs had commenced nine LCIA arbitrations in London (which had been subsequently stayed with the agreement of the LCIA and NTDC, pending the outcome of the expert determination). Following the expert determination (and NTDC’s challenge to the result), the stay on the arbitrations was lifted at the request of the IPPs.

The LCIA Court determined under LCIA Rule 16.1 that the seat of the arbitration should be London and a sole arbitrator was appointed.

NTDC subsequently applied for the arbitration to be stayed on grounds that the seat of the arbitration was Lahore, not London and that the Lahore injunction prevented the arbitration from proceeding.

Various proceedings took place in the courts in Lahore and the arbitration in London, including, a declaration from the arbitrator that the correct seat was London, following the NTDC application. The arbitrator issued a Partial Final Award finding in the IPPs favour finding that the expert’s determination was final and binding. NTDC challenged the award under s68 Arbitration Act but discontinued the proceedings.

Commercial Court proceedings

The IPPs came before the Commercial Court in December 2017 (judgment handed down 4 May 2018) seeking an anti-suit injunction from the English Court restraining NTDC from challenging the Partial Final Award in Lahore or anywhere other than England & Wales.

In the Commercial Court NTDC argued (having eventually agreed that London was the seat of the arbitration) tha