Province of Balochistan v Tethyan Copper Company PTY Ltd 2020 EWHC 938 Comm - 21 April 2020
1. The Claimant ("POB") applies for non-standard directions in its arbitration claim commenced on 5 August 2019, which comprises applications pursuant to sections 67 and 68 of the Arbitration Act 1996 in respect of an ICC partial award dated 8 July 2019 ("the Award"). POB seeks to contend that the ICC tribunal lacked jurisdiction because the contract containing the arbitration agreement was void for a number of reasons, one of which is that it was allegedly procured by corruption. POB also alleges serious procedural irregularity in a number of respects.
2. In the underlying ICC arbitration (which has not yet concluded but has been stayed pending the present claim), the Defendant to the present claim ("TCC"), an Australian mining company, brings claims against POB, a province of the Islamic Republic of Pakistan ("Pakistan"), arising out of a mining joint venture. More specifically, the claims arise out of a contract known as the Chagai Hills Exploration Joint Venture Agreement ("the CHEJVA") dated 29 July 1993 and governed by the law of Pakistan.
3. The standard directions for arbitration claims, based on the Part 8 procedure, are contained in §§ 6.2-6.7 of CPR PD 62. The non-standard directions which POB seeks are:
i) an order that the parties exchange statements of case;
ii) an order that a CMC be held following the close of pleadings; and
iii) an order bifurcating the claim so that the section 67 application is determined prior to the section 68 application.
4. TCC opposes POB's application. It contends as follows:
i) Consistently with sections 70(3) and 73(2) of the 1996 Act, POB's arbitration claim should be limited to the grounds of challenge and supporting evidence originally advanced in and accompanying its claim form, submitted within the 28-day period for filing such a claim. POB's application for non-standard directions is in substance an attempt, eight months out of time, to change the basis of its challenge and introduce an entirely new set of wide-ranging allegations concerning TCC's alleged corruption. POB failed to include in its claim form any of the corruption allegations it now seeks to advance, or to submit any of the voluminous evidence for which it now seeks directions, most or all of which it has had in its possession for many, if not all, of the five years since the ICC tribunal issued its decision on jurisdiction in 2014.
ii) POB's jurisdictional challenge, insofar as based on alleged corruption, is precluded by section 73(1) of the 1996 Act, because POB did not previously advance it as a jurisdictional objection in the arbitration itself but, on the contrary, expressly stated that its corruption allegations did not impugn the ICC tribunal's jurisdiction.
iii) A distinguished ICSID tribunal has already heard, and decisively rejected, the same corruption allegations following extensive litigation in respect of them, a determination which the ICC tribunal subsequently held to be binding on POB in the ICC proceedings. Those allegations could not therefore have been a legitimate basis for POB's section 67 challenge even if they had been included in POB's arbitration claim form.
iv) POB's request for non-standard directions is in reality an attempt to subvert the 1996 Act by transforming the streamlined and efficient process designed to deal with arbitration claims into a full-blown corruption trial with dozens of witnesses, thousands of documents and allegations spanning nearly three decades.
5. For the reasons elaborated below, the question of which objections POB can properly pursue, consistently with sections 70 and 73 of the 1996 Act, should be resolved first, promptly, before this claim proceeds further. It would be inimical to the proper approach to court intervention in arbitration to permit this claim to turn into a full-blown re-run of POB's corruption allegations if they are prima facie precluded by the 1996 Act. I consider that it would also be unjust for TCC to be required to plead a substantive defence to those allegations unless and until it were determined that POB is entitled to pursue them in this claim. I shall therefore give directions as outlined in section (H) below. I have set out my reasoning for these directions in reasonable detail in deference to the arguments of counsel before me, and in case it is of assistance to the court when hearing further stages of this claim.
(B) PROCEDURAL BACKGROUND
6. On 28 November 2011, following a dispute regarding the denial of a mining licence,
TCC commenced two arbitrations:
i) an arbitration claim against POB pursuant to an arbitration clause in the CHEJVA, and
ii) an arbitration claim against Pakistan under the Australia-Pakistan Bilateral Investment Treaty.
The arbitration against POB proceeded under the ICC rules ("the ICC arbitration") and that against Pakistan under the ICSID rules ("the ICSID arbitration").