‘[In previous correspondence] I advised the parties that, having considered their submissions relating to the Claimant’s application to amend his Statement of Claim, I had concluded that the application ought to be granted, with reasons to follow later.

The reasons for the aforesaid decision are the following.

1. The Claimant’s application was made under Article 19 of the ICC Rules and Article 23(2) of the International Commercial Arbitration Law, 1987 (No. 101 of 1987) of Cyprus for leave to amend the Terms of Reference in this arbitration in order to include a new claim in relation to the alleged illegal dilution of the shareholding of [Company X] in its … subsidiary ...

2. Article 19 of the ICC Rules provides as follows:

Article 19 New Claims

After the Terms of Reference have been signed or approved by the Court, no party shall make any claims or counterclaims which fall outside the limits of the Terms of Reference unless it has been authorized to do so by the Arbitral Tribunal, which shall consider the nature of such new claims or counterclaims, the stage of the arbitration and other relevant circumstances.

3. Article 23(2) of the International Commercial Arbitration Law, 1987 (No. 101 of 1987) of Cyprus provides as follows:

Statements of Claim and Defence

…

(2) Unless otherwise agreed by the parties, either party may amend or supplement his claim or defence during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow such amendment having regard to the delay in making it.

4. According to Bühler and Webster, Handbook of ICC Arbitration, [first] edition, the correct approach to an application under Article 19 is the following:

19-9

In deciding whether to permit the addition of new claims that fall outside the limits of the Terms of Reference, the Tribunal “shall consider the nature of such new claims or counterclaims, the stage of the arbitration and other relevant circumstances”. The closer a claim is to an existing claim, the more likely the claim is to be accepted. If the new claim is raised shortly after the signing of the Terms of Reference, it is much more likely to be accepted than if it is made during or after the oral hearings. The Tribunal will also want to consider a party’s ability to have introduced these claims at an earlier time. If new claims are withheld for purely tactical reasons, and are suddenly introduced into the proceedings, the Tribunal may take a restrictive attitude, provided that there are other factors that might militate against the belated introduction of the new claims. Those factors would include the ability of the parties to submit evidence and arguments on the new claims. However, these examples reflect the basic principle that the addition of new claims outside the limits of the Terms of Reference should not be permitted if it would raise due process issues under the Rules, the law of the place of arbitration or the law of the place of probable enforcement.

19-14

The impact of Article 19 should not be overestimated. The parties should make every effort to have all relevant claims within the Terms of Reference. In using the powers granted to it by Article 19 to permit new claims, the Tribunal should in fact take into account the effect of admitting the new claims on the conduct of the proceedings. If the new claim is filed at a time that allows the other party to respond to it without seriously delaying the timetable that was previously agreed, there would be no reason not to admit it, even if such claim could have been submitted before. On the contrary, if the admission of the new claim will delay the proceedings, considerations of fairness could lead a Tribunal to refuse to accept the claim if it is satisfied that the claim could reasonably have been submitted before.

5. Applying these principles, I came to the conclusion that the Claimant ought to be given leave to introduce the new claim arising from the dilution of [Company X]’s shareholding in [its subsidiary]. In particular:

(1) The application to introduce the new claim was made [some three months after the transmission of the case file to the sole arbitrator] at a relatively early stage of the proceedings, and well in advance of the substantive hearing scheduled [to begin three and a half months later].

(2) There is factual dispute between the parties as to whether the Claimant was aware of the dilution at the time that the Terms of Reference were signed. This dispute cannot be resolved at the present stage on the basis purely of the parties’ submissions and without hearing the parties’ evidence, as it raises clear issues of credibility. I therefore express no opinion on this issue.

(3) However, no reason has been suggested by the Respondents as to why the Claimant, notwithstanding (on the Respondents’ case) his knowledge of the dilution, should have refrained from introducing a claim based thereon when the Terms of Reference were signed, but should have conceived a sudden desire to do so [two months later] when, on the Claimant’s case, he did acquire such knowledge. In particular, there is no serious suggestion that the Claimant refrained for tactical reasons from introducing this claim when the Terms of Reference were signed.

(4) In the circumstances, I do not consider that this factual dispute should cause me to refuse the Claimant leave to introduce the new claim, if to do so will not delay the proceedings or lead to “due process” issues or cause prejudice to the Respondents.

(5) The factual ambit of the new claim appears relatively limited, and it has been possible to accommodate the introduction of the draft Amended Statement of Claim … within the timetable leading to the substantive hearing ... I am therefore of the view that the new claim will not delay the proceedings or lead to “due process” issues or cause prejudice to the Respondents.

(6) While the Respondents strongly dispute the validity of the new claim, they have the opportunity to present a full defence to it, by amending their pleadings, presenting evidence and cross-examining the Claimant’s witnesses at the hearing. I am therefore satisfied that the introduction of the new claim will not prejudice the Respondents in the presentation of their case.

(7) A refusal of leave to introduce the new claim would have precluded the Claimant from pursuing this cause of action, and would therefore have caused him prejudice.

(8) In all the circumstances, considerations of fairness required that the Claimant be given leave to amend his Statement of Claim.

6. I therefore confirm that the Claimant was given leave, pursuant to Article 19 of the ICC Rules and Article 23(2) of the International Commercial Arbitration Law, 1987 (No. 101 of 1987) of Cyprus, to amend his Statement of Claim in terms of the draft Amended Statement of Claim … I do not consider that it is necessary for the Terms of Reference to be amended so as to reflect the new claim.’