Summary

The central issue in this appeal is whether orders made by an arbitral tribunal were limited to those contained in the final dispositive section of its award, headed "Award", or whether they also encompassed matters the tribunal stated that it was ordering in an earlier section headed "Analysis", but not to be found in the final dispositive section.

The essential facts

By a final UNCITRAL arbitration award dated 30 January 2023 ("the Award"), following a London arbitration, the appellant ("NLNG") was held liable for failing to supply 19 FOB Cargoes of liquified natural gas to the respondent ("Taleveras") under the terms of a Master FOB LNG Sales Agreement dated 27 January 2020 ("the MSA") and a spot confirmation notice of 6 February 2020, as amended on 16 April 2020 ("the Spot CN").

NLNG was ordered to pay damages to Taleveras for its loss of profits on the 19 Cargoes in the sum of US$24m and also ordered to indemnify Taleveras in respect of any amounts it was found liable to pay in separate arbitrations with Vitol SA ("Vitol" and "the Vitol Arbitration") and Glencore Energy UK Limited ("Glencore" and "the Glencore Arbitration") relating to on-sale arrangements ("the Indemnity").

On 1 December 2023 the tribunal in the Vitol Arbitration published its final award, awarding Vitol damages against Taleveras in the principal sum of US$233,259,113.55 together with interest and costs ("the Vitol Award"). It is not suggested that any part of that award was by consent. On 5 December 2023 Taleveras sent a copy of the Vitol Award to NLNG and demanded payment of the sums awarded pursuant to the Indemnity.

On 8 January 2024 NLNG commenced proceedings in the Commercial Court, disputing its liability to indemnify Taleveras as claimed on the ground (among others) that it was a condition precedent of the Indemnity (the condition being expressed in paragraph 607 of the analysis section of the Award) that the tribunal in the Vitol Arbitration should have endorsed its award as to the applicability of the Indemnity to the sums awarded. NLNG claimed a declaration of non-liability and an injunction to prevent Taleveras enforcing the Indemnity in respect of the Vitol Award.

In its Defence filed on 5 February 2024 Taleveras denied that it was a condition of the Indemnity that the Vitol Award be endorsed as to its applicability, relying on the fact that paragraph 607 was not part of the final dispositive section of the Award.

On 21 February 2024 Taleveras commenced an arbitration claim in the Commercial Court, seeking permission to enforce the Award pursuant to section 66 of the Arbitration Act 1996.

On 1 March 2024 Taleveras filed an Amended Defence (by consent) to plead in the alternative that, on 12 February 2024, the tribunal in the Vitol Arbitration, on the application of Taleveras, had issued an Addendum and Final Additional Award ("the Addendum"), adding to the Award an endorsement that the sums awarded to Taleveras against NLNG "fall within the scope of [the Indemnity]".

In a Reply filed on 6 March 2024 NLNG asserted that the arbitrators in the Vitol Arbitration had no jurisdiction to add the Addendum to its award, asserting that they were functus officio, the arbitration having ceased, their contract with the parties terminated, and their actions being outside LCIA Rules which governed the arbitration.

The claims were tried together on 2 July 2024 by HH Judge Pelling KC ("the Judge"). In a reserved judgment dated 31 July 2024 the Judge determined that, as a matter of the proper interpretation of the Award, the Indemnity was not contingent on or subject to any declaration in the Vitol Arbitration or the Glencore Arbitration to the effect that the sums awarded fell within the scope of the Indemnity. He further held, in case he was wrong on the issue of interpretation, that the Addendum was valid.

Accordingly, also on 31 July 2024, the Judge made an order dismissing NLNG's claim, granting Taleveras permission to enforce the Indemnity in respect of the Vitol Award, granting a declaration as to the proper interpretation of the Indemnity, and entering judgment against NLNG for the relevant sums.

NLNG now appeals with permission granted by the Judge. For the reasons set out below I would dismiss the challenge to the Judge's finding as to the interpretation of the Award. As I understand that Warby and Zacaroli LJJ agree with that course, it is unnecessary to address the question of the validity of the Addendum.

The Award

The Award, issued by a tribunal comprising Mr John Beechey CBE (Presiding), Mr Nevil Phillips and Mr J William Rowley KC ("the Tribunal"), extended to 234 pages comprising 18 sections. After dealing with formal, introductory and explanatory matters, the facts were set out in section IX, the claims in section X, the defence in section XI, relief sought in XII and the list of issues in XIII. Section XIV contained "The Tribunal's Analysis". After sections dealing with interest and costs, section XVII was headed "Conclusions" and section XVIII was entitled "Award".

In the "Analysis" section, the Tribunal addressed the question of "Indemnification in respect of other claims" between paragraphs 594 and 607. After rejecting NLNG's argument that it could not make a final award for an "open-ended" indemnity, the Tribunal stated as follows:

"605. Accordingly, the Tribunal determines that Taleveras is entitled to declaratory relief to the following effect:

(1) NLNG shall (by way of damages) indemnify Taleveras in respect of its established liabilities to Vitol and Glencore arising from the 18 Cargoes identified as Nos. [...], including, but not limited to:

1. any amounts awarded by way of damages, compensation, interest or similar as well as legal costs and expenses, to Vitol in relation to Arbitration proceedings brought by Vitol against Taleveras on 26 January 2021 (and any further Arbitration proceedings Vitol brings against Taleveras with respect to the same cargoes);

2. any amounts awarded by way of damages, compensation, interest or similar as well as legal costs and expenses to Glencore in relation to Arbitration proceedings brought by Glencore against Taleveras on 31 March 2021;

3. Taleveras' legal costs and expenses relating to the Vitol and Glencore proceedings described above.

606. NLNG shall make payment of any liabilities described in (1) above within 21 days of the presentation by Taleveras of final award(s) in the Vitol and Glencore proceedings or order(s) by consent reflecting terms of settlement approved as reasonable by the arbitral tribunal seised of the proceedings and signed statement(s) from Taleveras' lawyers confirming Taleveras' costs of defending those proceedings.

607. The Tribunal further orders that the terms of this indemnity be drawn forthwith to the attention of the tribunals seised of the Vitol and Glencore arbitrations, and that any eventual enforcement of this indemnity be subject to the endorsement of those tribunals as to its applicability in the context of any award and, in particular, any consent award, made in either of those proceedings."

The "Conclusions" section stated "On the basis of the findings set out in this Award, the Tribunal has decided the Issues identified by the Parties as follows...". The Tribunal then answered each issue in the parties' respective lists. In answer to Taleveras' issue 7, as to whether it was entitled to an indemnity against losses arising from NLNG's breaches of contract in relation to all 19 cargoes, the Tribunal answered "Yes, to the extent that the Tribunal has found that Taleveras'... claims for an indemnity in respect of the Vitol and Glencore claims fall within the ambit of losses properly recoverable pursuant to [the MSA]". In respect of the equivalent issue at 2.11 of NLNG's list, the Tribunal answered "Yes, the claimed...indemnity fall[s] within [the MSA]".

The final Award section read as follows:

"For the reasons set out above, the Tribunal hereby DECIDES AND AWARDS as follows:

1. NLNG shall pay Taleveras damages in the amount of US$24,000,000.00 (US$ twenty-four million) in respect of its claim for lost profits on the 19 Cargoes 30, 46, 84, 86, 110, 152, 162, 140, 187, 163, 105, 227, 243, 251, 257, 57, 277, 318 and 320.

2. NLNG shall indemnify Taleveras in respect of any amounts awarded to Vitol by way of damages, compensation, interest or similar as well as its legal costs and expenses in relation to Arbitration proceedings brought by Vitol against Taleveras on 26 January 2021 (and any further Arbitration proceedings brought by Vitol against Taleveras with respect to the same Cargoes). To the extent that any such amount is the subject of an award or order by consent reflecting terms of settlement between Taleveras and Vitol, such terms shall be approved as reasonable by the arbitral tribunal seised of the proceedings.

3. NLNG shall indemnify Taleveras in respect of any amounts awarded to Glencore by way of damages, compensation, interest or similar as well as its legal costs and expenses in relation to Arbitration proceedings brought by Glencore against Taleveras on 31 March 2021. To the extent that any such amount is the subject of an award or order by consent reflecting terms of settlement between Taleveras and Glencore, such terms shall be approved as reasonable by the arbitral tribunal seised of the proceedings.

4. NLNG shall indemnify Taleveras in respect of its invoiced and paid legal costs and expenses relating to the Vitol and Glencore proceedings respectively and certified by Counsel for Taleveras.

5. NLNG shall make payment of any liabilities described in (2, 3 and 4) above within 21 (twenty-one) days of the presentation by Taleveras of final award(s) in the Vitol and/or Glencore proceedings or orders(s) by consent reflecting terms of settlement approved as reasonable by the arbitral tribunal seised of the proceedings and signed certificate(s) from Taleveras' lawyers confirming Taleveras' costs of defending those proceedings.

6. Taleveras shall forthwith draw the terms of the indemnities ordered at 2 and 3 above to the attention of the tribunals seised of the Vitol and Glencore Arbitrations respectively.

7. NLNG shall pay interest on Taleveras' lost profit damages at the rate of LIBOR + 2% per annum, compounded quarterly, from 24 October 2020 until the date of this Award.

8. NLNG shall pay interest to Taleveras at the rate of LIBOR + 2% per annum, compounded quarterly, on all sums due and payable by NLNG pursuant to this Award to Taleveras by way of damages, including pre-Award interest thereon and costs, from the date of this Award until the date(s) of payment. Any sums payable by way of an indemnity hereunder shall bear interest at the post-Award rate from the due date for payment until actual payment.

9. NLNG shall pay Taleveras US$1,756,514.82 and UK£521,357.40 in respect of its legal fees and expenses.

10. The Costs of the Arbitration in the amount of UK£605,956 shall be borne equally by the Parties.

11. All other claims of whatsoever nature are hereby dismissed."

On 28 February 2023 the tribunal in the Vitol Arbitration issued a partial final award in favour of Vitol. At NLNG's request, on 12 March 2023 the Tribunal issued a decision as to the interpretation of the Award pursuant to article 37(1) of the UNCITRAL rules 2013, confirming that "the Indemnities set out at Section XVIII (2) to (4) of the Final Award do not extend to the Partial Final Award (or any other partial award(s))" ("the Interpretation Decision"). As part of its reasoning the Tribunal stated:

"(x) in the opinion of the Tribunal, the terms of paragraphs 605, 606, and 607 and the terms of Section XVIII (2) to (6) inclusive of the Final Award are both clear and clearly intended to refer to any final determination (or consent award(s) or final settlement(s) approved by the Vitol and/or Glencore tribunals..."

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