White & Case and Slaughter and May are anxiously awaiting the result of a crucial House of Lords judgment that could redefine the powers of arbitrators.
The case, Lesotho Highlands Development Authority v Impregilo & ors, was heard in the Lords in May. The decision, expected this summer, will define the boundaries of arbitrators’ powers under the 1996 Arbitration Act.
The Lesotho Highlands Development Authority (LHDA) hired Impregilo and six other companies, collectively known as the Highlands Water Venture (HWV), to build a dam in the southern African state of Lesotho. Following the dam’s construction, HWV, represented by Slaughter and May partner Nick Gray, claimed additional labour costs and was partially successful at the International Chamber of Commerce arbitration.
White & Case client LHDA took the case to the UK courts after the arbitrators ordered that the award payable to HWV should be paid in sterling and euros, rather than local Lesothan currency, the maloti.
HWV appealed to the Lords against the Commercial Court and Court of Appeal decisions, saying that the tribunal had overstepped its powers by dictating currency and by awarding interest. The courts said that as the disputed contract was governed by Lesothan laws, the application of English law was wrong.
White & Case head of construction Ellis Baker instructed Nicholas Dennys QC of Atkin Chambers, while One Essex Court’s Ian Glick QC acted for HWV.