Arbitration

Jurisdiction - ad hoc agreement - allegation of breach of contract with arbitration clause - arbitrator holding respondents not party to contracts - arbitration awards susceptible of challenge in court by applicantsLG Caltex Gas Co Ltd and Another v China National Petroleum Corporation and Another: CA (Lord Phillips of Worth Matravers MR, Lords Justice Pill and Keene):15 May 2001The applicants claimed damages for breach of contract by the respondents.

The contracts contained arbitration clauses.

The respondents took part in the arbitration proceedings on the basis that they denied being party to the relevant contracts.

The arbitrator made two final awards, deciding that the respondents were not parties and therefore not liable to the applicants under the contracts.

On appeal Mr Justice Aikens determined as preliminary issues that the parties had reached an ad hoc agreement to confer on the arbitrator jurisdiction to decide the central issue of whether the respondents were parties to the contracts, and that it was not open to the applicants to challenge that finding in court.

The applicants appealed.Angus Glennie QC, Lawrence Akka and Toby Landau (instructed by Holman Fenwick & Willan) for the applicants.

Michael Collins QC (instructed by Zaiwalla & Co) for the respondents.Held, allowing the appeal, that awards made by an arbitrator determining that the respondents were not bound by the contracts containing the arbitration agreements and therefore not liable to the applicants were awards as to the arbitrator's substantive jurisdiction within section 67(1)(a) of the Arbitration Act 1996 which the arbitrator was competent to make under section 30; that since on the facts the parties had not made an ad hoc agreement extending the arbitrator's jurisdiction, the applicants were not precluded from challenging the awards, and had not lost the right to object to the awards by section 73 of the Act; therefore, the awards were susceptible of challenge by the applicants.

(WLR)