“Neither this Agreement nor any right or obligation in or under this Agreement may be transferred … by the Counterparty without the prior written consent of the Capital Provider”; “This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns”; and “No Person other than the parties hereto (and the Indemnitees and any Capital Provider Transferee) shall have any rights under this Agreement”
“Andrew Cohen [who gave evidence for Bloomfield] states that, unlike the litigation-cost funding that Bloomfield occasionally offered, where capital provided could only be used for litigation costs and expenses, the funding provided under the CPA was understood to be a monetization of the judgment on appeal in the Grow Land/Sandridge Litigation, “because US$15 million far exceeded the costs of litigating the appeal.”
“… 2. None of the Respondent companies have the resources to fight this case any further. We have already advised that Grow Land and KCV are unable to post either the security for costs ordered of them, or the counter-indemnity in respect of the security ordered to be provided by Claimant. 3. Respondents continue to fully maintain their defences, and Holdings maintains its denial that it is subject to the jurisdiction of the Tribunal and challenges jurisdiction accordingly. 4. The Tribunal will, no doubt, fairly adjudicate based on the record as it stands and as supplemented by further filings and briefings that are anticipated by the Procedural Orders. Absent legal counsel, Respondents do not consider that there is an equality between the parties as they are not able to assist the Tribunal. …”
“Should the Tribunal grant an award in favour of Bloomfield, we would therefore propose that the Tribunal makes a final award dealing with liability and remedies, following which Bloomfield would make separate representations addressing costs and interest with a view to an additional award being made.”
“We’ll consider this and provide directions as needed”
“39. Mr Hancock submitted to us that Andrew Smith J [the judge below] had failed to express or undertake any similar exercise. However, it is clear that Andrew Smith J had well in mind as primary factors the length of the delay, its causation and the reasonableness of both parties’ conduct: that is factors (i)-(iii) identified by Colman J. As to factor (iv), he also referred to prejudice, pointing out, correctly in the light of the Euston decision [Secretary of State for the Environment v Euston Centre Investments Ltd[1995] Ch 200 ], that prejudice was not an essential pre-condition. I would reject Mr Hancock’s submission that that means that Andrew Smith J may have thought that it was not a relevant consideration at all. 40. As to factor (v) identified by Colman J, the judge in the present case rightly underlined the policy of the Act and of the courts in relation to applications for permission to appeal, as stated in the Euston case. We are told that the present arbitration has not proceeded much further, but it seems to me that that is, on any view, a relatively minor factor. A party cannot, by a late application for permission to appeal which happens to have stopped the process of an arbitration (if indeed that is what has happened) significantly improve his position. 41. As to factor (vi), it is right that Andrew Smith J did not explicitly refer to the strength, or indeed the weakness, of the claim. Perhaps this was not discussed before him. Mr Hancock suggested that the present situation was, in any event, one where courts would not engage in any detailed way with the prospects, except perhaps in a clear case. In my judgment, this was, and is, clearly not a case where the owners’ claim can be regarded as so strong that it would obviously be a hardship for them not to be able to pursue it; if anything, rather the contrary. On any view, the prospects here were clearly not such as could have affected what was otherwise the judge’s view as to the right exercise of his discretion. 42. Finally, as to factor (vii), general considerations of fairness, the judge must have had well in mind considerations of overall justice and fairness. They must, however, always be viewed in the particular context that Parliament and the courts have repeatedly emphasised the importance of finality and time limits for any court intervention in the arbitration process. ….”
“These principles were drawn from a series of authorities which included Nagusina Naviera v Allied Maritime Inc[2002] EWCA Civ 1147 , [2003] 2 CLC 1 which (at [39]) appears to be the source of the further comment in Terna (at paragraph 27(iii)) that the first three factors identified above are the “primary factors”
“ 31. … the Court's approach to the strength of the challenge application will depend upon the procedural circumstances in which the issue arises. On an application for an extension of time, the Court will not normally conduct a substantial investigation into the merits of the challenge application, since to do so would defeat the purposes of the Act. However if the Court can see on the material before it that the challenge involves an intrinsically weak case, it will count against the application for an extension, whilst an apparently strong case will assist the application. Unless the challenge can be seen to be either strong or intrinsically weak on a brief perusal of the grounds, this will not be a factor which is treated as of weight in either direction on the application for an extension of time. If it can readily be seen to be either strong or weak, that is a relevant factor; but it is not a primary factor, because the Court is only able to form a provisional view of the merits, a view which might not be confirmed by a full investigation of the challenge, with the benefit of the argument which would take place at the hearing of the application itself if an extension of time were granted. 32. The position, however, is different where, as has happened in the current case, the application for an extension of time has been listed for hearing at the same time as the challenge application itself, and the Court has heard full argument on the merits of the challenge application. In such circumstances the Court is in a position to decide not merely whether the case is "weak" or "strong", but whether it will or will not succeed if an extension of time were granted. The Court is in a position to decide whether the challenge is a good or a bad one. If the challenge is a bad one, this should be determinative of the application to extend time. Whilst it may not matter in practice whether the extension is allowed and the application dismissed, or whether the extension is simply refused, logical purity suggests that it would be wrong to extend time in those circumstances: there can be no justification for departing from the principle of speedy finality in order to enable a party to advance a challenge which will not succeed. 33. Conversely, where the Court can determine that the challenge will succeed, if allowed to proceed by the grant of an extension of time, that may be a powerful factor in favour of the grant of an extension, at least in cases of a challenge pursuant to s.68. In such cases the Court will be satisfied that there has been a serious irregularity giving rise to substantial injustice in relation to the dispute adjudicated upon in the award. Given the high threshold which this involves, the other factors which fall to be weighed in the balance must be seen in the context of the applicant suffering substantial injustice in respect of the underlying dispute by being deprived of the opportunity to make his challenge if an extension of time is refused. Where the delay is due to incompetence, laxity or mistake and measured in weeks or a few months, rather than years, the fact that the Court has concluded that the s.68 challenge will succeed may well be sufficient to justify an extension of time. The position may be otherwise, however, if the delay is the result of a deliberate decision made because of some perceived advantage.”
“37. It is convenient to address the merits of the section 68 applications before dealing with the application for an extension of time. This is because the strength of the merits of a section 68 application is one of the factors to be considered in exercising the discretion as to whether to extend time, and in cases such as the present, where the court can reach a concluded view on the merits, is likely to be an important factor. If the section 68 challenge lacks merit, the application for an extension of time becomes irrelevant. If, on the other hand, the court concludes that the challenge is sound and that there has been a serious irregularity, that will often be an important factor in favour of the exercise of the discretion to extend time, as I sought to explain in Terna … at paras 31 to 33 …” “51. Of particular importance is the strength of the application. I have decided that in the two respects identified, Mr Oldham has suffered substantial injustice arising out of a serious irregularity. The sums of money for Mr Oldham are very significant. For him to be deprived of an opportunity to advance meritorious challenges, with a realistic prospect of successfully reversing the orders that he pay what are to him very significant sums, would be out of all proportion in fairness and justice to any culpability for the delay involved or its seriousness.”
“Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant— (a) failure by the tribunal to comply with section 33 (general duty of tribunal); (b) the tribunal exceeding its powers (otherwise than by exceeding its substantive jurisdiction: see section 67) …”
“46. Albeit dealing with where an arbitrator had “misconducted himself or the proceedings” under section 23 of the oldArbitration Act 1950 , there is a classic statement by Bingham J of the need to act fairly, by allowing the parties to put their case in relation to a finding by the arbitrator or in relation to a matter on which the arbitrator’s decision is based. This was in Zermalt Holdings SA v Nu-Life Upholstery Repairs Ltd[1985] 2 EGLR 14 . Bingham J said, at p 15: “the rules of natural justice do require … that matters which are likely to form the subject of decision, in so far as they are specific matters, should be exposed for the comments and submissions of the parties. If an arbitrator is impressed by a point that has never been raised by either side then it is his duty to put it to them so that they have an opportunity to comment. If he feels that the proper approach is one that has not been explored or advanced in evidence or submission then again it is his duty to give the parties a chance to comment. If he is to any extent relying on his own personal experience in a specific way then that again is something that he should mention so that it can be explored. It is not right that a decision should be based on specific matters which the parties have never had the chance to deal with, nor is it right that a party should first learn of adverse points in the decision against him.”
“the tribunal went its own way to a conclusion which neither [party] had contended for and did so unheralded. That, in my judgment, was fundamentally unfair.”" “the rules of natural justice do require … that matters which are likely to form the subject of decision, in so far as they are specific matters, should be exposed for the comments and submissions of the parties. If an arbitrator is impressed by a point that has never been raised by either side then it is his duty to put it to them so that they have an opportunity to comment. If he feels that the proper approach is one that has not been explored or advanced in evidence or submission then again it is his duty to give the parties a chance to comment. If he is to any extent relying on his own personal experience in a specific way then that again is something that he should mention so that it can be explored. It is not right that a decision should be based on specific matters which the parties have never had the chance to deal with, nor is it right that a party should first learn of adverse points in the decision against him.”
“52. The primary purpose of an award for interest is to compensate the creditor for having been kept out of his money, not to penalise the paying party, as I decided in relation to interest on costs: see Fattal and Fattal v Walbrook Trustees (Jersey) Limited and Another [2009] 4 Costs LR 591. 53. Interest should restore a claimant to the position in which it would have been if it had received the money. Since the claimant may be kept out of his money, the award of interest should cover the cost of borrowing such money. This is the essential basis for pre-judgment interest, and there seems to me no sufficient reason for a different approach in relation to interest post judgment.”
“Although no guidance is given in the 1996 Act as to how the discretionary right to award interest should be exercised, one very general principle is clear and should be borne in mind by arbitrators. This may be called ‘‘the compensatory principle’’. It is that an award of interest under Section 49 (in distinction to one under the 1998 Act discussed later) should be designed solely to compensate a successful claimant for having been kept out of the sum of money which the arbitrator has decided to award him. The award should not be penal in nature or such as to deter others from paying late.”
“35. Some irregularities may be so serious that substantial justice is “inherently likely” or “likely in the very nature of things” to result. As Toulson J stated in Ascot Commodities NV v Olam International Ltd [2002] CLC 277, 284F–285A: “Since the whole process of arbitration is intended as a way of determining points at issue, it is more likely to be a matter of serious irregularity if on a central matter a finding is made on a basis which does not reflect the case which the party complaining reasonably thought he was meeting, or a finding is ambiguous, or an important issue is not addressed, than if the complaints go simply to procedural matters … “It is inherently likely to be a source of serious injustice if irregularities occurred of the kind to which I have referred. Since the purpose of arbitration is to determine central issues between the parties, if there has been a flaw in that this has not been done, that is likely in the very nature of things to be a matter of serious injustice.” 36. In such cases substantial injustice may be inferred from the nature of the irregularity and that inference may be so strong that “It almost goes without saying”: see Raytheon at para 61. In that case the arbitrators had failed to deal with “key issues” which may well have impacted on an award of some£126m .” “Since the whole process of arbitration is intended as a way of determining points at issue, it is more likely to be a matter of serious irregularity if on a central matter a finding is made on a basis which does not reflect the case which the party complaining reasonably thought he was meeting, or a finding is ambiguous, or an important issue is not addressed, than if the complaints go simply to procedural matters … “It is inherently likely to be a source of serious injustice if irregularities occurred of the kind to which I have referred. Since the purpose of arbitration is to determine central issues between the parties, if there has been a flaw in that this has not been done, that is likely in the very nature of things to be a matter of serious injustice.”
“11. Mr Marsden’s evidence on this factor overlaps substantially with his evidence, at paragraph 47, in relation to Factor (f). In particular, at paragraph 47, Mr Marsden questions whether my clients’ failure to timely file their challenge applications was a deliberate tactical decision rather than due to lack of awareness. 12. Given that assertion, I have specifically gone back to Mr Hays and he has confirmed to me again, on behalf of all of the Defendants, that he was not aware of the 28-day deadline until after I was approached on29 September 2021 as stated at paragraph 89.2 of Caher 1. However, he informs me that, based on a review of his correspondence after my first statement was served, copies of which I have now been provided with and have reviewed, which I am in a position to therefore also confirm, and without waiving privilege, paragraph 89.2 is not entirely accurate. In particular, prior to my firm being instructed, Mr Hays’ Californian lawyer, Mr Serlin, informally approached Baker McKenzie and briefly spoke to a London-based partner on or about11 September 2021 . Mr Serlin did not inform Mr Hays of any 28-day deadline nor that the appropriate place to set aside either of the Awards was before the English Courts. The approach to Baker McKenzie was not thereafter pursued and instead my firm was subsequently retained and instructed. It is therefore not correct to say that the first time an English lawyer was “approached” was on29 September 2021 and Mr Hays and I apologise to the Court for this error. 13. Whilst, with the benefit of hindsight, Mr Hays accepts that it would have been advisable for him to have obtained advice from an English lawyer in addition to a Californian lawyer, Mr Hays did not do so because he mistakenly believed that the Californian courts are the appropriate venue for non-signatories of an arbitration agreement to seek to set aside an international arbitration award against a Californian respondent. This is evident from the Californian action Mr Serlin filed on Mr Hays’ behalf requesting that the California court set aside the arbitration award. When my firm replaced Mr Serlin as counsel to Mr Hays, my colleagues promptly amended the action to remove any such request. As this information demonstrates and as Mr Hays has assured me, he was neither aware nor advised, prior to my firm’s involvement, that the appropriate place to set aside a London seated arbitral award is before the English Courts (as set out above) and that there is a 28-day deadline from the date of the award for doing so. 14. Mr Hays is a Californian resident with no experience of English litigation, who has never lived or carried out business in England, and whose first experience of international arbitration was in connection with the CPA and Amended CPA. Mr Serlin had been retained by Mr Hays in connection with the Californian litigation that was the subject of the CPA and Amended CPA and he looked to Mr Serlin for advice. Mr Serlin, who is now in the process of retiring from the practice of law, practises from his own boutique law firm, Serlin & Whiteford, LLP, comprising two lawyers (Mr Serlin and Mr Whiteford), with their stated practice areas being creditors’ rights, receivership, bankruptcy, business entity formation / operation, real estate transactions and business transactions. I exhibit a copy of Mr Serlin’s CV that is publicly available on Serlin & Whiteford, LLP’s website ... 15. Although the Californian proceedings (in their original form) were first in time, Mr Hays does not accept that this amounted to a deliberate decision to focus his resources on California to the exclusion of England. Rather, he mistakenly believed that California was the appropriate venue to attempt to set aside an arbitration award rendered against him and his Californian companies. Had he been aware sooner that England was the appropriate place to seek to set aside the 2018 and 2020 Awards, and that there is a 28-day deadline for doing so, then he would have taken the present course of action sooner and not sanctioned the original Californian Complaint, which has since been amended in deference to the English Courts’ power, as the courts of the seat, to adjudicate upon the validity of the Awards. The Defendants accordingly dispute the allegation of any deliberate and/or tactical delay. The only reason for the delay was a lack of knowledge and familiarity with international arbitration and timely and proper advice from English and Californian lawyers. The Defendants rely, in this context, upon the fact that having retained my firm and myself, and having been made aware of the correct position, my firm worked expeditiously to apply to challenge the 2018 and 2020 Awards in this jurisdiction and at the same time amend the Complaint to raise a New York Convention challenge to the enforcement of the 2018 and 2020 Awards in California, rather than maintain the original Complaint that sought a declaration that any award was null and void for want of jurisdiction (i.e., essentially seeking to set aside the Awards, which was a matter for the English Court as the court of the seat).”
“That rate of interest is high, in our view, but it is expressly stated as a return on investment that is directly attributable to the risk inherent in this lending transaction. In these circumstances, we determine that it is an appropriate rate to apply to the damages awarded to Bloomfield.”
“The Tribunal exceeded its powers within the meaning of s. 68(2)(b) of the Act, in that, inter alia, (i) it made an extraordinary award of interest on the erroneous basis that the parties had “expressly agreed” an interest rate of 65% per annum, compounded quarterly; and/or (ii) if and to the extent that the Tribunal purported to exercise any discretion as to the award of interest, then it exceeded its discretion and acted on an impermissible basis outside of its power to grant interest since (inter alia) (a) the Tribunal took into account an irrelevant consideration, namely the rate of return stipulated in Paragraph 2 of Part 3 of Annex II to the Amended CPA; (b) the Tribunal used its power to award interest for an improper purpose being to award punitive damages and not for compensatory purposes, to compensate for the time value of money; and/or (c) otherwise made a decision that no reasonable and/or rational Tribunal could make. b. Further or alternatively, there has been a failure by the Tribunal to comply with s. 33 of the Act (and therefore s. 68(2)(a) is engaged), in that the Tribunal inter alia (i) failed to give the parties a reasonable opportunity of dealing with the approach adopted in the Awards in respect of interest on damages; and/or (ii) failed to adopt procedures suitable to the circumstances of this particular case. The Tribunal neither gave an opportunity to the parties to address the misconceived basis on which it intended to award interest and nor was any evidence submitted to justify such an approach. Further, so far as the Defendants are aware, the Claimant did not even advance a case for interest on the basis awarded.”