Sui Northern Gas Pipelines Limited v National Power Parks Management Company (Private) Limited
[2023] EWHC 316 (Comm)
Quaid-e-Azam Thermal Power (Private) Ltd v Sui Northern Gas Pipelines Limited
22 January 2024
[2024] EWHC 70 (Comm)
High Court
A company challenged an arbitration ruling. The judge carefully reviewed the legal arguments and documents from both sides. The judge decided the company challenging the ruling hadn't shown that the other side had acted unfairly or missed a key point during the arbitration. The original ruling stands.
Key Facts
- •Quaid-e-Azam Thermal Power (Private) Ltd (QATPL) challenged a final arbitration award dated August 2, 2022, against Sui Northern Gas Pipelines Limited (SNGPL) under Section 68 of the Arbitration Act 1996.
- •The dispute arose from unpaid invoices under a Gas Supply Agreement (GSA) signed July 22, 2016, concerning RLNG supply to QATPL's power plant in Pakistan.
- •QATPL challenged the award on two grounds: breach of Section 33 (unfair procedure) and failure to rule on a determinative issue (Section 68(2)(d)).
- •The core dispute centered on the interpretation of Section 3.6 of the GSA regarding 'Diversion of Gas and Take or Pay,' specifically whether SNGPL's claim was for breach of contract (requiring proof of actual loss) or for a contractual debt (regardless of loss).
Legal Principles
Section 68 challenges require demonstrating 'serious irregularity' causing 'substantial injustice,' a high threshold limited to 'extreme' cases.
RAV Bahamas Ltd and another v Therapy Beach Club Inc [2021] UKPC 8 at [30]-[37]
A substantial departure from pleaded cases is a breach of Section 33; arbitrators must resolve issues raised by the pleadings.
The Vimeira [1984] 2 Lloyd’s Rep 66 at 76; Ascot Commodities NV v Olam International Ltd [2002] CLC 277
Section 33 is breached if a party lacks a fair opportunity to address a point; a distinction exists between lacking opportunity and failing to recognize it.
Terna Bahrain Holding Company WLL v Al Shamsi [2013] 1 All E.R. (Comm) 580 at [85]
Section 68(2)(d) requires determining: (1) what is an issue; (2) was it put to the arbitrators; (3) did they fail to deal with it?
RAV Bahamas [2021] UKPC 8; Secretary of State for the Home Department v Raytheon Systems Ltd [2014] EWHC 4375 (TCC)
Outcomes
QATPL's Section 33 challenge (Section 68(2)(a)) dismissed.
The court found SNGPL's case consistently maintained that QATPL had a primary contractual obligation to pay 'take or pay' amounts, a position clearly reflected in the pleadings. No new case was advanced at the hearing, and QATPL had ample opportunity to respond.
QATPL's Section 68(2)(d) challenge dismissed.
The court held that the issue of SNGPL's late invoice issuance was raised by QATPL solely within the context of estoppel. The tribunal addressed the estoppel argument, finding no reliance or detriment. A separate contractual claim based on late invoices was never advanced by QATPL.