Oral Evidence and Cross-Examination Permitted on Challenge to Arbitratorís Jurisdiction.

6 October, 1998

Commentary
This matter is a good example for a case in which it may have been beneficial for the parties to agree to an application to the court under Section 32 of the Arbitration Act 1996 for the determination of a preliminary point of jurisdiction. Alternatively, the Applicant, who contended that it was not a party to the arbitration agreement, could have commenced proceedings under Section 72 of the Arbitration Act 1996.

Decision

The Court was conscious of the prejudice caused to the expeditious and economical disposal of the matter by permitting the taking of oral evidence but the decision to give directions for the hearing of the application on oral evidence pursuant to RSC Order 73 rule 14(2) was based on the fact that there were substantial issues of fact in dispute between the parties and that the court should be placed in a position to reconsider the relevant evidence without being tied to the arbitratorís findings on the facts, in particular in circumstances where the arbitrator has taken his decision to assume jurisdiction with some uncertainty.

Background

The arbitration arose on an agreement between former Soviet shipping companies concerning the ownership of containers. The arbitrator made a decision on jurisdiction under Section 30 of the Arbitration Act 1996, which he reached with some uncertainty, after hearing witnesses of fact and expert witnesses and considering questions of fact and of foreign law. The applicant challenged the decision on jurisdiction under Section 67 of the Arbitration Act and sought directions pursuant to RSC Order 73 Rule 14 that the application be heard on oral evidence. The respondent argued that this would de facto amount to a re-hearing of an issue on which there had already been a full hearing before the arbitral tribunal.

For more information please contact:

Neil Aitken or Charles Spragge in the International Arbitration Group, Cameron McKenna. Tel: 44 171 367 3000, Fax 44 171 367 2000 or by e-mail to [email protected][email protected] or to