Procedural Order (Jurisdiction)

1. I refer to the Partial Award dated …

2. This Procedural Order is to be read with the Partial Award and deals with the three jurisdictional objections taken by the Respondent.

3. The first objection relates to lis pendens and whether a stay should be granted on the basis of the civil and criminal proceedings referred to and identified in paragraph … of the Partial Award.

4. Lis pendens is a doctrine which can be invoked when two tribunals are charged with deciding the same legal rights as between the same parties. It is a rule of convenience. It is procedural and not substantive.

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11. It is important to remember that lis pendens is a rule of convenience and does not require the action which was started first to be stayed. Sometimes it is more convenient for the case begun second to continue and the first begun case to be stayed.

12. Moreover the decision in the Case … [pending before a court in Respondent’s country] would not lead to a money judgment as would an award in this arbitration. The purposes of the two tribunals are different. [The case pending before a court in Respondent’s country], is to decide whether urgent relief should be granted. The other is to decide sums due. The decision as regards urgent relief may be informed by an understanding of sums due, but not a complete understanding. A broad one would suffice. The decision in this arbitration would permit no such imprecision.

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15. So far as the criminal proceedings are concerned, these relate to criminal charges against two individuals. Those individuals have been convicted in absentia and are appealing against the verdict of the court.

16. There is no way in which a crime committed by an employee of either the Claimant or the Respondent can arrogate to the criminal court the adjudication upon the rights and liabilities of the parties to the contract which is the subject matter of this arbitral reference. Those rights and liabilities are subject to decision by arbitration. Whether [two directors of Respondent] committed a crime is another matter altogether. The two inquiries (by the Sole Arbitrator and the Criminal Court) are separate.

17. The Respondent submits that the arbitration should be stayed because of the public policy considerations set out in paragraphs … of its Answer to the Claimant’s Request for Arbitration.

18. Each is taken in turn.

19. Paragraphs … of the Answer to the Claimant's Request for Arbitration relies upon [the law of the place of arbitration and place of criminal proceeding] which states that a civil claim should be stayed until final judgment is issued in the criminal claim.

20. That statute does not apply in this case because no criminal claim is made against either the Claimant or the Respondent in respect of the subject matter of this arbitration. [The relevant article of the law] is not designed to prevent the ascertainment of the rights and liabilities of the parties to this contract whilst the criminal conduct of associated parties (in the case directors of the Respondent) is under consideration.

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24. Moreover it would be a perverse result if a party to a contract, be they employer or contractor, could pray in aid the fact that one of its directors is appealing a criminal conviction in order to prevent or delay the other party from having its rights vindicated in an arbitration. That result would be contrary to public policy.

25. Accordingly I decline to order a stay on the grounds of the outstanding criminal appeals against [directors of Claimant].