A court in London recently upheld an arbitral award in the face of claims that the arbitral panel failed to consider several coverage defenses one party asserted during the proceedings. The arbitration arose from a dispute between contractors relating to the construction of a power station in Kabul, Afghanistan. The prime contractor (“JV”) engaged Symbion Power LLC (“Symbion”), which in turn engaged Venco Imtiaz Construction Co. (“Venco”) as a sub-contractor. JV and Symbion participated in an arbitration in 2012 (“prior arbitration”) which preceded the current arbitration between Venco and Symbion in 2013. The arbitral panel issued an award in Venco’s favor in July 2016. This opinion arises from Symbion’s challenges to the arbitral award on the grounds that the arbitral panel failed to address two coverage defenses outright, and failed to address all essential parts of two other coverage defenses. The court addressed in turn each of the four defenses Symbion alleges were not adequately addressed by the arbitral panel.
First, Symbion alleged a defense that the court referred to as the “conclusive evidence” defense. Symbion argued Venco’s case was based on invoices and POs it treated as conclusive evidence of the amount due to Venco, but Symbion disputed that these documents were conclusive. The court concluded this was not actual an issue that arose, and, further, the panel did not treat the invoices and POs as conclusive evidence, so they could not have “failed’ to deal with the defense.
Second, Symbion asserted a defense that Venco failed to meet its burden of proof. However the argument was framed in the arbitration, and the court held the defense was addressed by the panel, which decided against Symbion.
Third, Symbion argued that the panel was bound by the findings in the prior arbitration. The court noted the collateral estoppel issue was not one the panel needed to address because it had fallen away. But if the issue was still in play, it was not reasonably arguable and there would be no substantial injustice had the panel not dealt with it.
Fourth, Symbion alleged the prior arbitration award was binding or persuasive as to value, and as to proof and evidence. The court found this defense was repetitive of the collateral estoppel defense, and rejected the defense for similar reasons.
Finally, the court admonished one of the arbitrators for inappropriate ex parte conduct with Symbion, the party that appointed him. The Symbion-appointed arbitrator e-mailed Symbion at the outset of the proceedings to complain about the third, neutral arbitrator, with the express condition that Symbion not use the complaint in any of its arbitral submissions. While the episode was not dispositive to any issues in the court’s review, it sharply criticized such conduct as inappropriate. Symbion Power LLC v. Venco Imtiaz Constr. Co., Case No. HT-2016-000211 (Royal Court of Justice Mar. 10, 2017).
This post written by Thaddeus Ewald .
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