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PRIL - "International Consensus"

. Russian Federation v. Luxtona Limited

In Russian Federation v. Luxtona Limited (Ont CA, 2023) the Court of Appeal considered the interesting arbitral competence-competence issue of whether a court jurisdictional hearing was more akin to a conventional appeal or a hearing de novo. In this task the court had reference to the 'international consensus' on the issue:
(2) The “international consensus” issue

[43] The appellant’s second submission is that the Divisional Court erred by saying that there was a “strong international consensus” in favour of its conclusion that a de novo hearing was appropriate in the circumstances of this case.

[44] I do not accept this submission. During oral argument, counsel for Luxtona referred to a single Singapore lower-court decision (Government of the Lao People’s Democratic Republic v. Sanum Investments Ltd., [2015] SGHC 15) in support of its position. However, the weight of international authority supports the Divisional Court’s conclusion. The leading case in this area, specifically relied on by the Divisional Court, is Dallah, wherein a five-judge panel of the United Kingdom Supreme Court addressed this issue.

[45] In his reasons, Lord Mance said, at para. 30:
The tribunal’s own view of its jurisdiction has no legal or evidential value, when the issue is whether the tribunal had any legitimate authority in relation to the government at all. This is so however full was the evidence before it and however carefully deliberated was its conclusion.
[46] In a similar vein, Lord Collins said, at para. 96:
The consistent practice of the courts in England has been that they will examine or re-examine for themselves the jurisdiction of arbitrators. This can arise in a variety of contexts, including a challenge to the tribunal’s jurisdiction… or in an application to stay judicial proceedings on the ground that the parties have agreed to arbitrate. Thus in Azov Shipping Co v. Baltic Shipping Co… Rix J. decided that where there was a substantial issue of fact as to whether a party had entered into an arbitration agreement, then even if there had been a full hearing before the arbitrator the court, on a challenge… should not be in a worse position than the arbitrator for the purpose of determining the challenge. This decision… is plainly right.
[47] In a third judgment, Lord Saville said, at para. 160:
In my judgment therefore, the starting point cannot be a review of the decision of the arbitrators that there was an arbitration agreement between the parties. Indeed no question of a review arises at any stage. The starting point in this case must be an independent investigation by the court of the question whether the person challenging the enforcement of the award can prove that he was not a party to the arbitration agreement under which the award was made. The findings of fact made by arbitrators and their view of the law can in no sense bind the court, though of course the court may find it useful to see how the arbitrators dealt with the question. Whether the arbitrators had jurisdiction is a matter that in enforcement proceedings the court must consider for itself.
[48] Courts in several other countries, including Hong Kong, Singapore and Australia, have explicitly endorsed Dallah and followed its reasoning: see, for example, S Co v. B Co, [2014] 6 HKC 421; AQZ v. ARA, [2015] SGHC 49; Sanum Investments Limited v. The Government of the Lao People’s Democratic Republic, [2016] SGCA 57; and Lin Tiger Plastering Pty Ltd. v. Platinum Construction (Vic) Pty Ltd, [2018] VSC 221.

[49] Based on all of these authorities, I cannot conclude that the Divisional Court erred in determining that there was a “strong international consensus” in favour of a de novo hearing in the circumstances of this dispute.


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Last modified: 06-06-23
By: admin