International Construction Law Review
ALL’s WELL THAT ENDS WELL: LONDON REMAINS A SUITABLE VENUE FOR INTERNATIONAL ARBITRATION—BUT ONLY THANKS TO THE HOUSE OF LORDS
ANTONIO CRIVELLARO
Partner and Head of the International Arbitration Department Bonelli Erede Pappalardo Law Firm, Milan
1. SUMMARY OF THE CASE
The facts of the Katse
(Lesotho
) case are perhaps known to the international construction community and to the readers of this Review
.1
However, a brief summary will help in understanding the following comments. Reading these comments, the reader should be aware that, in the arbitration proceedings, the present author acted as counsel for the contractors.
Between 1991 and 1998, an unincorporated joint venture formed of eight co-contractors (six European and two South African companies, together “the claimants”) executed certain works comprising the construction of a major dam (known as Katse Dam) in the Kingdom of Lesotho for the Lesotho Highlands Development Authority (“LHDA”) as employer (due to a subsequent merger, the co-contractors became seven). During performance of the works, most of the disputes were settled by means of determinations by the engineer or recommendations by the Disputes Review Board (“DRB”) (the contract, the conditions of which were modelled upon FIDIC 4th edition, provided for both the engineer’s and the DRB’s interventions as pre-arbitral mechanisms for settling disputes).
Only a relatively small number of claims remained to be settled after completion of the works and, by the end of 1999, the contractors referred those pending claims to ICC arbitration as provided in the arbitration agreement (clause 67 of the contract). Although clause 67 provided that arbitration would take place in Geneva, considering that all three arbitrators appointed were based in London, it was agreed to move the venue, i.e. the “juridical seat”, from Geneva to London. The Terms of Reference drawn up under Article 18 of the ICC Rules reflected this change by indicating that the proceedings would be governed by both the UK Arbitration Act 1996 (the “Act”) and the ICC Rules.
On 25 January 2002, the arbitral tribunal issued an award in relation to all
1 This Review
has already published an article summarising the facts of the case up until the decision of the Court of Appeal dated 31 July 2003: see E Baker and A Lavers, “Lessons from Lesotho: Arbitrators’ Powers Reviewed” [2004] ICLR 140, who fully endorse the decision of the Court of Appeal. See also p. 493, below.
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London Remains Venue for International Arbitration
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