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X v Y [2013] EWHC 1104 (Comm)

The Claimant in these Commercial Court proceedings is challenging an arbitration award under sections 67 (jurisdiction) and 68 (serious irregularity) of the Arbitration Act 1996. The Defendant applied for security for costs and for an order that the Claimant pay into court the amount of damages awarded by the tribunal in the challenged award.

Teare J ordered that security for costs should be provided. He found that there was a real risk that the assets of X were not readily available for the satisfaction of any order for costs. In particular, it could not be said that X's high value shareholding in a subsidiary company was readily realisable, such that X could be made to pay with any high degree of promptness.

Rejecting the application for a payment to be made into court in relation to the damages awarded by the tribunal, Teare J followed the guidance of Flaux in A v B [2011] 1 Lloyd's Reports 363 following an earlier disagreement amongst Commercial Court judges. Although Teare J found that X's challenge to the jurisdiction of the arbitrators was flimsy and lacking in substance, he was not satisfied that the challenge to the award would prejudice Y's ability to enforce the award.

Charles Kimmins QC and Patricia Edwards acted for the Defendant.