CASE LAW DEVELOPMENTS
A Cure for All Claims
The UK Government has granted indemnity from potential claims to the pharmaceutical company Pfizer in case of any complications resulting from the use of the COVID-19 vaccine. Indemnity was also granted to the medical institutions with the UK National Health Service (NHS) providing the vaccine.
Although the Pfizer/BioNTech vaccine is an unauthorized drug, it has been included in the list of drugs authorized for use in such emergencies as a pandemic.
Ben Osborn, Pfizer's UK managing director, has refused to explain why the company needed such an indemnity.
An Arbitrator to Pay Over 300 Thousand Euro of Damages to the Parties for a Gross Violation of the Principles of Impartiality and Independence
A sole arbitrator, who is given a fictional name of "Juan Ignacio" in the judgment of the Court of Appeal of Asturias, was chosen as an arbitrator in two arbitrations under separate syndication agreements between the shareholders of two companies rendering funeral services, La Montañesa and El Alisal in Santander.
In the awards issued on the same day in 2017, the arbitrator ordered that two shareholders in La Montañesa pay EUR 24 million of compensation. Juan Ignacio requested EUR 800,000 as his fee.
Both awards were later challenged by the shareholders, as the arbitrator had been a legal counsel for La Montañesa and El Alisal since 2013 and continued to perform that role even after the filing of the claims. The Court found that Juan Ignacio had been earning around EUR 12,000 per year for such consulting services.
After the reversal of the awards, the parties also filed a separate lawsuit invoking a violation of Art. 21 of the Spanish Arbitration Act that provides that arbitrators may be personally liable for the damages caused by bad faith, recklessness or fraud, and claimed over EUR 500,000 of damages (including the costs related to the shareholders' bankruptcies).
In its recent judgment, the Court of Appeal of Asturias agreed with the court of first instance that Juan Ignacio had been guilty of "serious negligence" and ordered him to pay a compensation in amount of EUR 339,635 to both parties. In doing so, the Court expressly relied on the IBA Guidelines on Conflicts of Interest in International Arbitration, ruling that Juan Ignacio's conduct was a "Red List" situation.
The CAS Rules on Doping
On 11 December 2019, the World Anti-Doping Agency (WADA) banned Russian athletes from the Olympics and world championships for four years.
By its 17 December 2020 award, the Court of Arbitration for Sport (CAS) upheld WADA's decision, but shortened the duration of Russia's ban to two years, providing for a number of restrictions for that period. Until 16 December 2022, athletes will be able to compete in the Olympics and Paralympics, as well as world championships only under a neutral flag and provided that they go through additional doping tests.
A US District Court in California Holds That Fans Unhappy about Pandemic-Related Event Cancellations Must Arbitrate Their Claims Even If They Had Not Read the Ticket Terms and Conditions Containing an Arbitration Clause
American fan who was refused a refund due to the indefinitely postponed Rage Against The Machine concert filed a suit against Ticketmaster.
The fan's anger was triggered by the website's changes in the refund policy due to the pandemic's spreading in the US and extension of the new rules to cover previously executed ticket purchase agreements.
Ticketmaster had already prevailed in the past in a dispute with baseball fans, holding that a click-through arbitration agreement was valid.
The Svea Court of Appeal Rejects Gazprom's Appeal against the SCC Interim Award
The subject matter of this dispute was the pricing under the Yamal contract between the Russian gas company and the Polish PGNiG. In its award, the SCC recognized the PGNiG's right to arbitrate a claim to reduce the gas price under the contract. Later, the arbitral tribunal in Stockholm granted the Polish company's claims; as a result, Gazprom refunded an overpaid amount of USD 1.5 billion.
Given that the award upheld by the Svea Court of Appeal does not concern the merits of the dispute, Gazprom reported in its Telegram channel that the status quo in the dispute has been maintained.
The Commercial Court in London Orders the LCIA to Fix Its Error
On 21 January 2020, the London Court of International Arbitration (LCIA) obliged the co-owner of the transportation and logistics company Delovye Linii Alexander Bogatikov to pay USD 58 million to the former co-owner of that company and the CEO of Bank Trust Mikhail Khabarov. On 6 March, Khabarov's counsel filed an application to recognize and enforce that award to the Commercial Court of Saint Petersburg. The Court refused to enforce it, since the LCIA had awarded Khabarov USD 58 million, but erred in its calculations, adding the alleged "tax liabilities" to the company's value instead of deducing them.
Bogatikov then applied to the Commercial Court in London seeking an order that the LCIA revise its award to that extent. The Court concluded that the error made by the arbitral tribunal was material and noted that the tribunal made "the sort of simple mistake any of us can make," but "with the most unfortunate consequences." The request to have the entire quantum analysis reviewed, however, was dismissed by the Court. Thus, the LCIA will have to revise its award as regards the error only.
Equatorial Guinea Loses the Dispute with France over the Paris Mansion
On 11 December 2020, the majority of the International Court of Justice voted to confirm that the 42 Avenue Foch mansion in Paris was not covered by diplomatic immunities. The mansion, worth EUR 107 million, was seized by the French authorities in 2011 in their investigation of a corruption case initiated against the son of the President of Equatorial Guinea. The police confiscated various valuable objects in the premises of the mansion, including a fleet of luxury cars owned by Teodoro Nguema Obiang Mangue, the then Equatorial Guinea's Minister of Agriculture.
Equatorial Guinea protested against France's actions, believing the building to be part of its diplomatic mission in France and hence not subject to seizure, and applied to the ICJ in 2016.
The Court concluded that the 1961 Vienna Convention on Diplomatic Relations does not allow a state to unilaterally impose its choice of premises for a mission if the host state objects to that choice. In the opinion of the Court, France objected against the use of the mansion, and that objection was neither arbitrary nor discriminatory.
Fish Files in WTO
The representatives of the member states of the World Trade Organization have once again failed to agree to ban the subsidies that result in over-fishing of commercial fish stocks, but they intend to continue negotiations in 2021.
According to the UN food agency, almost 90% of marine fish stocks are nearly depleted. Back in 2015, the world leaders in the UN committed to a target of striking a WTO deal by 2020 that would put an end to multi-billion subsidies that contribute to over-fishing by such culprits as China, the EU, the US, South Korea, and Japan.
Reuters reports that although the negotiators had been discussing the text of the agreement for several months in secrecy, they have failed to even agree on the definition of the term "fish", or the section on exceptions for developing countries suggested by India.
Additionally, since China has in the past resisted attempts to limit the exploitation of the high seas with its industrial fishing fleet, the success of the negotiations is believed to depend, to a certain extent, on Beijing.
Australia Challenges the Barley Tariff
Australia launches the WTO dispute settlement procedure against China's 80% tariff on barley imposed in May 2020. This is Australia's first response to China's sanctions on dairy products, meat, wine, and other products (accounting for the total of 40% of Australia's exports). According to preliminary estimates, the political conflict has already cost Australia AUD 80 billion. Australia intends to resolve a dispute by an independent WTO arbitrator, or, "if both parties are willing to come to the table," settle it outside of the WTO mechanisms.
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