Unilateral option clauses provide for disputes to be referred to arbitration, but give one party the exclusive right to elect to refer a dispute to litigation before the courts; the clauses also provide for disputes to be referred to a court, but give one party the exclusive right to elect to refer the dispute to arbitration instead. Parties should exercise caution when considering whether to include unilateral option clauses in their agreements.
The Court of Appeal recently considered for the first time the question of an expert's duty to avoid a conflict of interest. The court's decision, while not deciding the point finally, means that it is unlikely that a court will now recognise such a duty as a matter of law. The issue is a matter of contract. The judgment contains a useful analysis of when conflicts can arise in related cases and the circumstances in which a large organisation offering expert or litigation support services may find itself conflicted.
The Supreme Court recently unanimously upheld a Court of Appeal decision to dismiss an application to remove an arbitrator on the grounds of apparent bias. The Supreme Court confirmed the Court of Appeal's decision that arbitrators are under a duty to disclose appointments in references concerning the same or overlapping subject matter with a common party, although the Supreme Court's reasoning differed.
The High Court recently granted an extension of time to bring challenges to arbitral awards made under the Arbitration Act. The applications were striking as it had been several years since the awards were made. While the extension granted by the court was exceptional, so too were the circumstances of the case. Here, the integrity of both the arbitration system and the court were threatened and this public policy concern outweighed the principle of finality.
The Supreme Court has clarified definitively the principles for ascertaining the law governing an arbitration agreement. In contrast to the Court of Appeal's earlier decision in the same case, the Supreme Court held that where the law governing an arbitration agreement is not expressly specified, a choice of main contract law (whether express or implied) will generally also apply to an arbitration agreement which forms part of that contract.
The Commercial Court recently rejected an airline's argument that the COVID-19 pandemic had frustrated its aircraft lease agreements and that it was therefore relieved of its contractual obligation to make rent payments. The court held that the airline's inability to operate the aircraft was a risk that it had assumed when it entered into the aircraft lease agreements. This decision will be welcomed by aircraft lessors and financiers.
In a recent case, the Commercial Court decided that the claimant, aircraft leasing company Helice, must arbitrate its claim against airline Garuda for more than $5,150,000 in unpaid lease rent under London Court of International Arbitration rules instead of proceeding by court action. The court endorsed the 'one-stop shop' principle established by the House of Lords, which holds that the parties to a contract are likely to have intended for any disputes arising out of that contract to be decided in the same forum.
The Corporate Insolvency and Governance Act 2020 shifted the focus of the UK insolvency regime from administration and liquidation to rescue and recovery and introduced numerous interesting features that apply to companies experiencing financial difficulties. This article considers how some of these features fit into the insolvency regime of the Cape Town Convention.
The government aims to implement a UK emissions trading system (UK ETS) in January 2021 following Brexit. This article outlines aviation-specific considerations of the proposed UK ETS and the interaction of the proposed scheme with the Carbon Offsetting and Reduction Scheme for International Aviation, the International Civil Aviation Organisation's market-based mechanism for offsetting emissions from aviation.
A recent High Court case demonstrates the utility and importance of including standard representations and warranties regarding power, authority and validity in aircraft leases, including as an estoppel against a defendant's claim that a lease is void and unenforceable as a result of alleged breaches of foreign public procurement legislation and lack of authority. The decision also illustrates the benefit of choosing English law to govern aircraft lease transactions, particularly between international parties.
The government has announced that interest-free buy-now-pay-later (BNPL) credit agreements will be regulated by the Financial Conduct Authority. At present, the BNPL market operates under an exemption from regulations for consumer credit lending. The announcement comes as a review of the unsecured credit market unexpectedly urgently recommends regulating all BNPL products.
Bank of England Governor Andrew Bailey recently delivered a speech entitled "Reinventing the Wheel (with more automation)", in which he outlined regulatory changes that payments market participants can expect, including as part of the global regulatory response to stablecoins. Bailey emphasised the importance of not stifling innovation and highlighted the benefits that stablecoins, in particular, could offer.
In 2019 the Financial Conduct Authority (FCA) hosted conduct roundtables with 18 wholesale banks termed the 'engine room'. The roundtables culminated in the FCA's latest report on the 5 Conduct Questions Programme, 'Messages From the Engine Room', which reflects the FCA's findings and perspectives. This article summarises the key takeaways from the report and provides commentary and questions that firms might usefully address.
In the context of a claim brought by Strident Publishing Limited against Creative Scotland, the Competition Appeal Tribunal has reiterated that UK and EU competition law applies to a public body only where it is acting as an 'undertaking'. The judgment provides helpful guidance for the purposes of assessing whether a public body is acting as an undertaking, such that UK or EU competition law would apply to its activities.
In April 2020 the Competition Appeal Tribunal (CAT) dismissed a challenge by Ecolab, Inc of the Competition and Markets Authority's (CMA's) decision in its final report on Ecolab's completed acquisition of The Holchem Group Limited, including in relation to the CMA's required divestiture remedy. The CAT's judgment confirms the CMA's ability to reject proposed remedies where it does not have a high degree of confidence that they will effectively address identified competitive concerns.
In June 2020 the Competition and Markets Authority (CMA) made a number of announcements regarding certain investigations into resale price maintenance (RPM) within the UK musical instruments sector. However, these announcements have wider consequences in the context of the CMA's enforcement activities more generally in relation to RPM.
The government has published details of the National Security and Investment Bill, which will introduce a foreign direct investment screening regime in the United Kingdom. This follows on from recent revisions to the UK merger control regime, which introduced a new public interest criterion (in relation to public health emergencies) and lowered the jurisdictional thresholds applicable to certain activities in the United Kingdom (relating to AI, cryptographic authentication technology and advanced materials).
The Competition and Markets Authority (CMA) recently publicised the disqualification of three individuals from acting as directors as a consequence of their company's involvement in an infringement of UK competition law. In view of the CMA's commitment to enforcement actions and to ensuring that directors are held personally responsible for competition law compliance, individuals and organisations should, among other things, proactively consider the extent of any potential exposure that they may face.
Many listed companies are now starting to prepare for the 2021 annual general meeting (AGM) season and plan their next annual report. This article summarises some of the key agenda items for 2021, including with regard to AGM arrangements, shareholder engagement, remuneration, climate, diversity and the COVID-19 pandemic.
The Coronavirus outbreak may result in an upsurge of force majeure-related claims under commercial contracts. A further risk now coming to light is customers seeking to enforce contractual fines, penalties, service credits or liquidated damages in connection with supplier failure or delays arising from coronavirus-related issues. As such, a reminder of the law in this area now also feels appropriate.
In 2018 the Court of Appeal rejected a stockbrocker's appeal against the High Court's decision that it owed a client a Quincecare duty. In a recent ruling, the Supreme Court upheld the Court of Appeal's decision. The client's Quincecare claim was held not to have been defeated by illegality as, in the circumstances, the fraud of a sole shareholder of a company should not be attributed to the company itself.
In November 2019, in the looming shadow of the collapse of Thomas Cook Group plc, the Business, Energy and Industrial Strategy (BEIS) Committee published a letter of recommendations to Secretary of State for the Department of BEIS Andrea Leadsom. The letter follows BEIS's inquiry into the collapse of Thomas Cook and the factors that led to the global travel group's downfall and covers a range of recommendations relating to corporate governance, audit reform and executive pay and bonuses.