Half a billion dollar arbitral award upheld: Clarification given by high court as to judgment interest on awards

04/04/14

In rejecting Sonatrach’s challenge to an arbitration award in favour of Statoil in an amount in excess of US$ 500 million and rejecting also an application to set aside a judgment thereon, Mr Justice Flaux in the Commercial Court cast doubt on the proposition that a challenge could ever be mounted under section 68(2)(a) of the Arbitration Act 1996 on the basis that the Tribunal had overlooked important evidence tendered by a party as to do so would trespass on an area which is the sole preserve of the Tribunal, namely the assessment of the admissibility and weight of the evidence. In doing so, reservations were expressed about dicta to the contrary of Toulson J in Arduina Holdings BV v Celtic Resources Holdings Plc [2006] EWHC 3155 (Comm).

Further, the Judge held that post-award interest is treated differently by the English courts depending on whether it is to apply pre or post judgment. In the former case the English court has no jurisdiction to award such interest, the position being governed by Section 49 of the Arbitration Act 1996 which leaves the matter to the discretion of the arbitral tribunal. In the latter case, where judgment has been entered on an award under Section 66 (an English award) or Section 101(2) of the Arbitration Act (a New York Convention Award) the judgment has the same characteristics as any other judgment of the English court and interest runs under the Judgments Act from the date of the judgment at which point the award merges into a judgment debt.

La Société pour La recherché, La Production, Le Transport, La Transformation et La Commercialisations de Hydrocarbures S.P.A. (“Sonatrach”) and Statoil Natural Gas LLC (Statoil”).

The judgment is here.