CL-2025-000046 - [2025] EWHC 1738 (Comm)

This question only arises if section 45 is properly engaged (ie if the Interveners fail on Issues 1-4). That suggests that it is not a suitable preliminary issue. The time for the exercise of the court’s discretion would arise as and when the court addresses the Question of Law which India seeks to have determined. During the course of the hearing counsel for the Interveners accepted that Issue 5 was not an appropriate preliminary issue.

Counsel has submitted that the suggested preliminary issues 1-4 could be fairly dealt with in a day’s hearing (with the court having read into the matter before). Counsel for India and the Administrator suggested longer would be required. However, it seems to me that Issues 1-4 raise quite short points and ought to be capable of being argued well within a day.

If Issues 1-3 or Issue 4 are decided in favour of the Interveners that would determine the Arbitration Claim. There would be no need to consider the Question of Law.

By contrast India says that Issues 1-4 are simply “arguments that will need to be determined at the final hearing of the Section 45 Application” (see paragraph 41 of India’s Skeleton Argument) and that the hearing of all issues will take 3-4 days (see paragraph 73 of India’s Skeleton Argument). There must also be factored in the possibility of an appeal which militates against the determination of preliminary issues (see paragraphs 68-71 of the India’s Skeleton Argument). This being an arbitration claim there will be no saving in terms of disclosure or witness evidence (see paragraph 72 of the India’s Skeleton Argument). In the result it is said that the balance comes down in favour of a single hearing of all issues.

The Administrator says much the same. Hearing all issues will require a hearing of 3-4 days (see paragraph 56 of his Skeleton Argument) whereas a hearing determining preliminary issues followed by, if India and the Administrator succeed on the preliminary issues, a further hearing to determine the Question of Law, will lead to an increase in costs (see paragraph 55 of the Skeleton Argument).

I am not sure how or why India and the Administrator estimate 3-4 days for a hearing at which all matters are considered. They stress that the Question of Law is purely a question of law and will not involve any consideration of the facts or in particular of the public policy issues which so troubled the Tribunal. That being so I would have thought that a 2 day hearing would be sufficient for all issues to be argued. It may be however that I have underestimated the nature of the debate on the Question of Law. It was not a subject much discussed before me. But it is difficult to see why more than 3 days would be required.

I accept that a hearing of preliminary issues in an arbitration claim will not save the costs associated with witness statements and disclosure which are the sort of savings one looks for when a hearing of preliminary issues is sought in a trial. That might suggest that the appropriate course is to have all issues heard at the one hearing in order to avoid the possible delay and costs associated with two hearings.

But there is a further factor to take into account.

The Commercial Court has a major role in supervising the conduct of arbitrations in London. The Court is, for good reason (see section 1 of the Arbitration Act), concerned not to stray into the terrain which is properly that of the arbitral tribunal. Consideration of the Question of Law will require the Court to review the decision of the Tribunal on that very question and so enter the terrain of the Tribunal. If (and I emphasise if) section 45 is properly engaged in this case then it would appear that the Court will have to enter the terrain of the Tribunal. However, if, as the Interveners contend, section 45 is not properly engaged in this case then the Court will not have to enter the terrain of the Tribunal if Issues 1-4 are determined as preliminary issues. That being so, a powerful reason for directing the hearing of Issues 1-4 is that if the Interveners are correct not only will the costs of determining the Question of Law be avoided but, even more importantly, there will be no risk of the Commercial Court being seen to enter the terrain of the Tribunal.

I have therefore reached the clear conclusion that there should be a determination of Issues 1-4 as preliminary issues. A hearing of 1 day should be fixed (which I am told could be next term) with 1 day’s pre-reading.