Lisa Dudzik is a contracts and claims manager based in Qatar. Today, she writes about letting the arbitration process run its due course.
In Australia, the courts discourage getting them involved in arbitration processes. This was learned the hard way by Sino Dragon Trading Ltd, a company based in Hong Kong.
While working together on a project, Noble Resources International Pte Ltd (a subsidiary of the Noble Group) served an arbitration notice on Sino Dragon, claiming a breach or variance of contract, proposing that the Australian Centre for International Commercial Arbitration (ACICA) be the appointing authority and appointing M as an arbitrator. Sino Dragon neither responded nor appointed an arbitrator. After two months, Noble Resources wrote the Permanent Court of Arbitration in the Hague, requesting that that Court’s secretary-general designate ACICA as the appointing authority.
Despite notifying Sino Dragon about the request made by Noble Resources, the Permanent Court of Arbitration did not receive any responses from the former, and thus appointed W as the appointing authority. Another arbitrator, B, was appointed by W as the second arbitrator when Sino Dragon still did not respond. Finally, both M and B appointed a third and presiding arbitrator, H.
Noble Resources advised W that B’s firm was acting for another subsidiary of the Noble Group in separate proceedings in China, which might involve proceedings in Hong Kong, and that B was not directly involved. B added that that B’s firm had a Chinese division which was financially separate from the Australian division which was acting in behalf of Noble Resources.
Sensing a potential conflict of interest, Sino Dragon submitted to the Tribunal several challenges to the appointment of the arbitrators. Before the final challenge was determined, however, it filed an application with the Federal Court of Australia challenging the appointments.
Stay tuned to this blog to read more from Lisa Dudzik.