Minister of Finance (Incorporated) 1Malaysia Development Berhad v International Petroleum Investment Company Aabar Investments PJS  EWHC Civ 2080,  Bus. L.R. 45
The Court of Appeal determined that a s67 and s68 appeal should be given priority over second arbitrations between the same parties. Stays of arbitration appeals will rarely be granted for case management reasons and only where there are compelling grounds to do so. It was also appropriate to restrain the second arbitrations by way of anti-suit injunction.
An arbitration between the parties was compromised by settlement deeds, containing LCIA arbitration agreements, and by a consent award.
The Claimants later issued s67 and s68 applications, seeking set aside of the consent award on the basis that the tribunal did not have substantive jurisdiction and that it had been procured by fraud.
The Respondents then commenced new arbitrations under the settlement deeds, for declarations that they were valid and for payments of sums allegedly due.
The first instance Judge ordered a stay of the arbitration appeals on case management grounds and refused to grant anti-suit injunctions restraining the second arbitrations.
The Court of Appeal overturned this decision. It confirmed that parties to a London arbitration cannot contract out of the rights to challenge arbitral awards under s67 and s68 .
As to the stay, its reasoning was based on the fact that the Court’s appeal jurisdiction is founded both on the agreement of the parties to London arbitration and on wider considerations of public interest .
It is in the public interest that a valid arbitration award should be recognised and enforced and against the public interest for the powers of the state to be used to enforce an award in a case where the arbitrators had no jurisdiction or which is the result of a serious irregularity . When deciding whether the award is one which should benefit from the coercive power of the state for its recognition and enforcement, the Court is acting as a branch of the state, not as an extension of the consensual arbitration process [44-45].
It is the duty of the court to determine s67 and s68 challenges as promptly as possible. Exercising this supervisory jurisdiction quickly avoids uncertainty and injustice in the enforcement process. The question is therefore whether the case is the rare one in which there are compelling grounds for the grant of a stay [46-47, 56].
As to the injunction, the test is whether there are exceptional circumstances, usually, as a minimum, meaning that the applicant’s rights have been infringed, or that continuation of the arbitration would be vexatious, oppressive or unconscionable [67-68]. That threshold was met [73-75].
This important Judgment strikes a welcome, common sense balance between the dangers of over-intervention in arbitral proceedings and the need to protect the public interest by upholding the safeguards set out in the 1996 Act.