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Blitzkrieg in London arbitration: AGA Partners has prevailed in the dispute

AGA Partners successfully represented a major oil producing and trading company in London arbitration initiated by an international trading company, registered in United Arab Emirates (UAE). The stakes in this case were extremely high – the opponent claimed recovery of more than 28 million US dollars! 

The case concerned the parties’ disagreement regarding the conclusion of the contract on supply of a large parcel of sunflower oil. Although their preliminary negotiations did not result in signing of the contract, the UAE counterparty wrongfully declared the client in default for failure to deliver the goods and commenced London arbitration. 

While initiating the proceedings, the UAE counterparty made several procedural mistakes which, on their face, would have appeared harmless – they failed to put the arbitral institution in the copy of the email, enclosing the notice of arbitration, and failed to attach a copy of the alleged contract to it. But these procedural mistakes triggered a whole cascade of serious procedural irregularities which eventually led to the premature nomination of an arbitrator instead of the client. 

As the client had been deprived of its essential right to participate in the constitution of the arbitral tribunal, AGA Partners raised objections against jurisdiction of the tribunal. Eventually, the tribunal held that premature appointment of arbitrators poisoned the entire arbitration process. On this basis, the tribunal declined its jurisdiction to consider the case at hand. 

The present case vividly illustrated the paramount importance of proper and prudent commencement of arbitration and the constitution of the arbitral tribunal. 

This case was handled by the brilliant team led by Ivan Kasynyuk and Iryna Moroz with the assistance of Ievgen Boiarskyi and Pavlo Lebediev. 

17.11.21