basis for construing "legal and other costs" narrowly in the context of the Act, and that the correct test involved considering what other costs were incurred in bringing or defending a claim, as the case may be.
It is relevant to note that the arbitrator was critical of the Respondent's conduct, both as regards its repudiatory breach of the contract in issue in the proceedings and in respect of the arbitration proceedings themselves, finding that the Respondent had deliberately put the Claimant in the position where it was unable to fund the arbitration out of its own resources.The costs of the proceedings were ordered to be paid on the indemnity basis.
We are not aware of any previous Englishseated arbitration where a tribunal has awarded third party funding costs in addition to legal costs as "other costs". Traditionally, compensation due to a third-party funder has not been held to be a recoverable cost.
Permission to appeal was refused by the High Court and we will await with interest any application for permission to appeal to the Court of Appeal. Regardless of whether there is an appeal, this case will trigger further interest in third party funding for arbitration, albeit that the facts of this case and, in particular the arbitrator's criticism of the Respondent's conduct, may mean that Essar is not an authority which arbitral tribunals will easily be persuaded to follow
About the Authors
Mark Hilton - Partner
Mark is an experienced litigator and international arbitration lawyer and has acted for contractors, sub-contractors, employers, owners and financiers in significant disputes whether by litigation, arbitration, adjudication, mediation or other types of dispute resolution both in the UK and internationally. He has been advising on construction issues for over 30 years, primarily in relation to contentious matters but also in relation to complex contractual negotiations.
Jamie Curle - Partner
Jamie has extensive knowledge of cross-border disputes, particularly in the banking, funds and financial services sectors (including structured products disputes), fraud and asset tracing matters and natural resources disputes. He has been involved in a large number of complex and high profile cases in recent years before domestic and international courts as well as arbitral tribunals.
James Carter - Partner
James has experience in complex commercial litigation and arbitration. He acts for clients across a broad spectrum of sectors including energy, banking and financial services, construction, insurance, media and IT. He began his career as a barrister, where he gained significant advocacy and advisory experience.