In the case of Shell Egypt West Manzala GmbH v Dana Gas Egypt, the High Court has held that a party to arbitration proceedings had a right of appeal against the award of the arbitral tribunal under s69 of the Arbitration Act 1996 even though the parties had previously agreed that the award would be ‘final, conclusive and binding’.

Background

Section 69(1) of the Arbitration Act 1996 states:

“Unless otherwise agreed between the parties, a party to arbitral proceedings may (upon notice to the other parties and to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings”.

Facts

Shell Egypt (S) and Dana Gas (D) entered into an agreement. Clause 14 of the agreement provided:

"The construction, validity and performance of this agreement shall be governed by English law.

Any disputes arising out of or in connection with this agreement or the application, implementation, validity, breach or termination thereof shall be settled by arbitration in London, under the Uncitral Arbitration Rules. The number of arbitrators shall be three. The appointing authority shall be the London Court of International Arbitration. The arbitration shall be conducted in the English language. The arbitrators shall not award consequential, punitive or other similar damages in connection with the decision of any dispute hereunder.

The dispute shall be submitted to the arbitrators in such manner as they shall deem appropriate and the decision of the majority of the arbitrators, rendered in writing, shall be final, conclusive and binding on the parties …"

A dispute arose between the parties. The dispute went to arbitration. The arbitral tribunal made an award in favour of D. S sought leave to appeal on a point of law pursuant to s69. D argued that the effect of the words ‘final, conclusive and binding’ in clause 14 of the agreement was to exclude S’s right of appeal under s69.

Decision

The High Court held that in the context of a standard arbitration clause, such as clause 14, the words ‘final, conclusive and binding’ did not exclude a party’s right of appeal under s69. These words did no more than describe the effect of a valid arbitral award on the parties. ‘Final’ referred to the fact that the successful claimant was precluded by the award from bringing the same claim again in a fresh arbitration or action. ‘Binding’ meant that each party promised to abide by the award and perform it. ‘Conclusive’ meant that parties were precluded from reopening in a later dispute individual issues of fact or law that had been decided by the award.

Sufficiently clear words would be needed to exclude a party’s right of appeal under s69. The words ‘final, conclusive and binding' were not by themselves sufficient to do this. The fact that the parties had used the word ‘conclusive’ in addition to 'final and binding' did not change the position.

Comment

This decision highlights the need for parties intending to exclude the right of appeal under s69 to draft the exclusion into the arbitration clause carefully and clearly. In this decision, the High Court did not give any guidance on what would amount to the necessary ‘sufficiently clear words’. Favourable reference was made to the wording of Article 28.6 of the current ICC Rules which states that by submitting the dispute to arbitration the parties shall be deemed to have “waived their right to any form of recourse”. However, the court did not specifically confirm that this wording would be ‘sufficiently clear’.

Further reading

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