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SAB Miller Africa v Tanzania Breweries Ltd and Another: Herbert Smith comment
Practical Law Legal Update 4-501-8446 (Approx. 3 pages)
SAB Miller Africa v Tanzania Breweries Ltd and Another: Herbert Smith comment
| Published on 30 Mar 2010 • England, Wales |
Ruth Byrne (Solicitor Advocate) and Joanne Greenaway (Professional Support Lawyer), Herbert Smith LLP
The English Court of Appeal has ruled that an arbitration agreement did not confer wider powers to grant injunctive relief than those conferred to by section 44 of the Arbitration Act 1996. Clear words would be needed to escape the section 44 restrictions.
In SAB Miller v Tanzania Breweries Ltd and Another [2010] EWCA Civ 1564 (a judgment dated December 2009 but only recently published), the Court of Appeal considered whether the parties had, by agreement, conferred powers to grant injunctive relief which were wider than those conferred by section 44 of the Arbitration Act 1996. Rejecting this argument, the Court held that the injunction had, on the facts, been granted under section 44. Furthermore, Laws LJ held that clear words would be needed to escape the section 44 restrictions which would apply to any order falling within its terms. It followed that the restrictions imposed by section 44 (including the rule that only the first instance judge could grant permission to appeal) applied. For more detailed discussion of the factual background, see Legal update, Clear words needed to contract out of section 44 requirements.
The DAC Report (paragraphs 214-216) provides insight into the thinking behind section 44 of the Arbitration Act 1996:
"if a given power could possibly be exercised by a tribunal, then it should be, and parties should not be allowed to make unilateral applications to the court. If, however, a given power could be exercised by the tribunal, but not as effectively, in circumstances where, for example, speed is necessary, then the court should be able to step in."
Thus, the restrictions contained in section 44 of the Arbitration Act, to which there is no counterpart in section 37 of the Senior Courts Act 1981, are important to "prevent any suggestion that the court might be used to interfere with or usurp the arbitral process".
In the light of these considerations, Lord Justice Laws' conclusion, despite the fineness of the construction of the relevant provisions of the parties' agreements in this case, seems sound: the restrictions in section 44 were put there purposefully and should not be considered excluded by the parties to an agreement absent "very clear provision" to that effect.
However, this case might also be considered illustrative of the unresolved "tension…between the apparently wide powers conferred on the court by section 37 and the much narrower powers conferred on the court by section 44" alluded to by the Court of Appeal in Cetelem SA v Roust Holding Limited [2005] EWCA Civ 618 at 74 per Clarke LJ. Definitive guidance from the courts as to how the two provisions interact is awaited.