Case No: 2014 Folio 1105 & 2015 Folio 47
Neutral Citation Number: [2015] EWHC 2979 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 22/10/2015

Before :

MR JUSTICE BURTON
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Between :

	STOCKMAN INTERHOLD SA	Claimant	
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	ARRICANO REAL ESTATE PLC	Defendant	

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James Collins QC and Siddharth Dhar (instructed by Freshfields Bruckhaus Deringer LLP) for the Claimant
Matthew Weiniger QC (of Herbert Smith Freehills LLP) for the Defendant

Hearing dates: 12 and 13 October 2015  
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Judgment
Mr Justice Burton : 
1.	This has been a consolidated hearing of two arbitration claims under ss. 67 and 68 of the Arbitration Act 1996 (“the Act”) brought by Stockman Interhold SA as Claimant, represented by Mr James Collins QC and Mr Siddharth Dhar and Arricano Real Estate PLC as Defendant, represented by Mr Matthew Weiniger QC.  
2.	The arbitration claims arise out of agreements entered into between the Claimant and Defendant in February/March 2010 in relation to a Cypriot joint venture company, Assofit Holdings Ltd (“Assofit”), which, at the time of the transaction, through its Ukrainian subsidiaries owned a large shopping centre development (“Sky Mall”) in Kiev.  The agreements between the parties included a Share Purchase Agreement, dated 29 December 2009, pursuant to which the Claimant purchased 50% plus 1 share of the issued share capital in Assofit, a Shareholders Agreement (the SHA) and a Call Option Agreement (the COA), both dated 25 February 2010.  
3.	The SHA regulated the parties’ respective rights in Assofit.  The COA gave the Defendant the option to call for the Claimant to sell its entire shareholding in Assofit to it in certain circumstances (“the Call Option”).  In relation to the Call Option and the payment of the option price there was an Escrow Agreement dated 24 March 2010.  
4.	The SHA provided for disputes to be resolved by arbitration under the UNCITRAL Rules, while the COA provided for disputes to be resolved by LCIA arbitration, by a sole arbitrator.  
5.	A dispute arose between the parties.  The Claimant contended that the Defendant had breached the SHA and the COA by soliciting a third party, Dragon-Ukraine Properties & Development PLC (“DUPD”) as an investor, and for such purpose disclosing confidential information to DUPD.  The Defendant issued a Call Option exercise notice on 5 November 2010, with a view to purchasing the Claimant’s shares in accordance with the COA.  The Claimant countered by asserting that by disclosing confidential information to DUPD the Defendant had repudiated the SHA and the COA, and issued a notice of termination of both agreements.  On 9 November 2010 the Claimant commenced LCIA arbitration proceedings seeking a declaration that (i) the COA had been validly terminated and (ii) that the Call Option could not be exercised.  On 21 December 2010 the Defendant commenced UNCITRAL arbitration proceedings, seeking a declaration that the SHA had not been validly terminated and therefore continued to bind the Claimant.  
6.	The UNCITRAL arbitration provided for a tribunal of three, to which each party nominated an arbitrator, and Mr Audley Sheppard QC was appointed jointly by the parties as Chairman.  Mr Sheppard was also appointed as sole arbitrator (“the Arbitrator”) in the LCIA arbitration.  By virtue of the relationship between the two arbitration proceedings, the parties agreed to stay the LCIA arbitration until the UNCITRAL arbitration had been concluded, and in addition reached an agreement which is recorded as an order of the Arbitrator in Procedural Order No.1 in the LCIA arbitration: 
“Any determinations in the UNCITRAL arbitration . . . shall be binding on (“with prejudice” to) the parties to this LCIA arbitration.”
7.	In accordance with this agreement the UNCITRAL arbitration proceeded first, and the Tribunal issued its award on 9 June 2011 (the “UNCITRAL Award”), which included the following paragraphs relevant to my decision: 
“181.	Whether [the Defendant’s] alleged breaches go to the root of the SHA is influenced by whether [the Claimant] is viewed as a short term investor/funder or a longer term strategic partner of [the Defendant] in the Sky Mall project. 
182.	. . . Clause 11.2 of the SHA provides that neither party may dispose of its shares or there to be a change of control for 2½ years from 1 July 2010, i.e. till 31 December 2013, defined as the “Standstill Period”, unless mutually agreed.  At the end of the Standstill Period, if either Shareholder wants to sell, it has first to offer its shares to the other party.
. . .
184.	However, the SHA also included a Call Option (Clause 13), which entitled [the Defendant] pursuant to the terms of the COA to acquire [the Claimant’s] shares “exceptionally within period starting from 15 November 2010 up to 15 March 2011 inclusive” (Clause 3.2, COA).  It is not for this Tribunal to interpret the COA (which is subject to a separate arbitration), and in particular what is meant by “exceptionally”, but the fact that [the Defendant] could in certain circumstances buy-out [the Claimant] within several months from signing the SHA indicates that the parties did not necessarily envisage that they were inextricably united until December 2013.  The fact that the COA set out what the payment to [the Claimant] would be for every day during the exercise period to achieve an IRR of 40% indicates that the parties envisaged its exercise to be a real possibility.
. . .
 187.	The Tribunal considers that [the Claimant] was entitled to be viewed as a medium term investor, at least up until 31 December 2013, unless and until [the Defendant] validly exercised the Call Option, and that [the Claimant] was entitled during that time to insist upon strict compliance with the SHA by [the Defendant] (unless waived).  [The Claimant] was entitled to be treated with due respect as a co-shareholder with a common interest and objective to that of [the Defendant] (being the success of the Sky Mall project) and [the Defendant] was not entitled to ignore or undermine [the Claimant’s] rights as set out in the SHA. 
. . .
193.	The SHA and the COA were disclosed to DUPD for the specific purpose of persuading DUPD to invest in the Sky Mall project (and other projects) . . .
. . .
197.	The majority of the Tribunal finds that such disclosure was a fundamental breach or a breach going to the root of the SHA entitling [the Claimant] to consider itself discharged from further performance.  It was critical to the ongoing relationship that [the Defendant] did not tout the Call Option in the market with a view to finding new investors to replace [the Claimant]. [The Defendant] knowingly and intentionally ignored those confidentiality requirements, with a view to persuading DUPD to become its new partner and to provide funds to use to exercise the Call Option and remove [the Claimant] as a shareholder.  Accordingly, [the Claimant] was entitled to terminate the SHA on 8 November 2010.”
Of the Tribunal of three, the Arbitrator was the dissenting minority.  
“210.	. . .  [the Defendant’s] conduct was cynical . . . [and] evidences [the Defendant’s] complete disregard for the SHA and the obligations owed to and rights of [the Claimant].  
. . . 
213.	Accordingly [the Claimant] was entitled to terminate the SHA. . .”
8.	The LCIA arbitration then proceeded, and the Arbitrator issued his award on 13 December 2011 (“the First Award”).  He concluded that the Claimant had validly terminated the COA, in the following terms: 
“247.	Given the Parties’ agreement to be bound by the determinations in the UNCITRAL Arbitration, I consider that I should apply the reasoning of the majority of that Tribunal mutatis mutandis.  Accordingly, I find that disclosure of the terms of the COA to DUPD amounted to a fundamental breach of the COA.
248.	Had it not been for the Parties’ agreement, I would have found that disclosure of the COA to DUPD did not amount to a fundamental breach (preferring the view of the minority expressed in the UNCITRAL Arbitration Award). . . . I would have concluded that [the Defendant’s] discussions with DUPD, including mention of the Call Option, were not so egregious nor went to the root of the contract so as to amount to fundamental breach.”
He also concluded that although the Defendant had complied with the provisions of the COA in relation to the exercise of the Call Option, it had not validly exercised such option by reason of its failure to comply with provisions of the Escrow Agreement: paragraph 291: “I am forced to conclude that service on the Escrow Agent prior to 15 November 2010 is not effective vis-à-vis the Escrow Agent . . .”:  paragraph 302: “the Call Option exercise notice was not signed by, nor sent under any cover letter or other communication from [the representative of the Defendant identified in the Escrow Agreement]”.  
9.	The Defendant then brought a number of challenges before this Court under s.68 and s.69 of the Act to the UNCITRAL Award and the First Award, but succeeded on only one of them before Field J on 16 July 2012.  Field J accepted the Defendant’s submissions that the Arbitrator, in breach of s.68(2)(d) of the Act, had not dealt with an important issue raised before him, namely that non-compliance with provisions of the Escrow Agreement did not vitiate the Claimant’s liability to sell its shares in Assofit to the Defendant or invalidate the exercise of the Call Option (paragraphs 37 and 45).  By his Order of 16 July he remitted the First Award to the Arbitrator “for him to (a) reconsider his finding that the call option was not validly exercised by [the Defendant] on account of its failure to comply with the requirements of the Escrow Agreement; and (b) thereafter to decide any remaining issues that arise for determination.”
10.	After the remitted hearing, the Arbitrator issued his Second Award dated 19 August 2014, by which he concluded that compliance with the provisions of the Escrow Agreement was not indispensable for a valid exercise of the Call Option.  He therefore concluded that the Defendant was entitled to specific performance of the COA, rejecting the arguments of the Claimant (inter alia) that the Defendant was disentitled to such equitable relief by virtue of unclean hands, namely by reference to its repudiatory conduct in respect of the SHA and COA.  
11.	The Claimant raises three challenges to the Second Award, of which I leave the third (the “paragraph 168 point”) to later in this judgment.  The two challenges are based upon the Claimant’s case that in excess of his jurisdiction or his power, or by way of a serious irregularity (in breach of s.67 and s.68 of the Act) the Arbitrator made findings directly inconsistent with the findings of the UNCITRAL Award (by which in his First Award he had rightly accepted he was bound) in breach of Procedural Order No.1 and/or in excess of the jurisdiction remitted to him by Field J.  The two respects were as follows (I quote from paragraph 25 of the founding witness statement of Mr Kasolowky for the Claimant dated 12 September 2014): 
“(1)	In paragraph 77 of the Second Award, where the Arbitrator purported to find that [the Claimant] was to be regarded as a short term investor rather than a medium term investor; 
(2)	In paragraph 113 of the Second Award, where the Arbitrator purported to find that [the Defendant] had not acted egregiously in disclosing the COA to DUPD.”
(1) Short Term Investor
12.	The case was somewhat expanded by Mr Collins in his submissions, and in a way which Mr Weiniger submitted fell foul of the principle, enunciated by Colman J in Westland Helicopters Ltd v Sheikh Salah Al-Hejailan [2004] 2 Lloyd’s Law Rep 530 at 38, that claimants in arbitration proceedings challenging an award are limited to the matters set out in their claim form (which in this case reflects Mr Kasolowky’s summary).  I was prepared to accept that the way Mr Collins was putting the case as expanded did not stray outside the general ambit of the pleading, and that, insofar as it did so, was by way of reply to the Defendant’s response.  Mr Collins’ expanded case was put on the basis that the inconsistency lay in the Arbitrators’ conclusion in his Second Award that the Claimant was envisaged as a short term investor and that it was more likely than not that the Defendant would exercise the Call Option.  
13.	The paragraphs of the Second Award which were considered for the purposes of addressing this argument are as follows: 
“1.	Compliance with Escrow Agreement not Indispensable
. . . 
75.	Accordingly, my task is to discern the intention of the Parties, objectively speaking, from the words used in the COA in their relevant context and against the factual background in which the COA was created. 
76.	If there are two plausible constructions, I am entitled to prefer the construction which is more consistent with “commercial common sense”, if that can be ascertained.  
77.	The context and factual background to the SHA, the COA and the Escrow Agreement were set out in the First Award.  In summary, [the Defendant] needed funds to acquire and develop a shopping complex in Kyiv, referred to as Sky Mall.  [The Claimant] provided a substantial cash injection and became a “50% + 1 share” shareholder in Assofit.  However, [the Defendant] was given the right to buy all of [the Claimant’s] shares (i.e. the 50% + 1 share, comprising 1601 shares in total) during a prescribed period and at a predetermined price, pursuant to the terms of the COA.  There was argument during the UNCITRAL Arbitration and the first phase of this arbitration whether it was envisaged that [the Claimant] would be a short or long term investor but my view of the evidence is that it was envisaged that [the Claimant] would be a short term investor, providing bridge finance for which it would receive a very high rate of return (i.e. 40% p.a.).  The less likely scenario was that [the Defendant] would decide not to exercise its Option and [the Claimant] would remain the majority shareholder in Assofit.  In any event, it was envisaged that while [the Defendant] and [the Claimant] remained joint shareholders, their relationship would be regulated by the SHA.  
. . .
91.	After further careful consideration, I conclude that compliance with the Escrow Agreement was not indispensable for valid exercise of the Call Option.  
. . . 
93.	Clause 2.1 of the COA states that [the Claimant] grants to [the Defendant] an option to require [the Claimant] to sell all the Option Shares “on the terms set out in this Agreement” – it does not add “and the Escrow Agreement”.  In order validly to exercise the Call Option, I find that [the Defendant] had to satisfy Clause 3.3 of the COA only.  I have already found in the First Award that it did.  
. . . 
2.	Escrow mechanism not the only permissible means of completion
. . . 
100.	Again, there is force in [the Claimant’s] argument that the Escrow Agreement should be seen as inseparable to the COA and that the requirements of both agreements are cumulative.  On [the Claimant’s] case, Completion could only take place by the Escrow Agent returning the Envelope to [the Defendant], in strict compliance with Clauses 2.1 – 2.3.1 of the Escrow Agreement.  On balance, for the reasons just given, I do not agree.  
101.	I acknowledge that the COA is open to two plausible constructions.  I consider that my preferred construction better accords with the context and background of the COA, which was to give [the Defendant] the right to acquire the Option Shares and take back control of Assofit.  I concluded from the evidence in the first phase of this arbitration that it was the expectation of the Parties that [the Claimant] would be bought out and I note that [the Claimant] is referred to in the COA as “the Investor” in the COA.  It is consistent with that context and background that compliance with the Escrow Agreement should not be indispensable and that the Escrow mechanism should not be the only permissible means of Completion.  My preferred construction is also more consistent with business common sense, because it does not give inflated significance to the mechanism of Completion to the detriment of [the Defendant’s] substantive right to acquire the Option Shares once it has delivered the Call Option Exercise Notice.  In this respect, Credit Agricole was the Keeper of the Envelope, whose role was to give comfort to [the Defendant] that the documents would be kept safe and that it would get the documents upon payment and comfort to [the Claimant] that the transfer documents would not be released without payment from [the Defendant] and would be handed only to Mr Pinchuk.  It would be unlikely that common sense businessmen would expect the terms of an escrow arrangement to frustrate their underlying bargain which in this case was transfer of the Option Shares back to [the Defendant] within a prescribed period for full pre-agreed consideration. 
102.	[The Defendant] referred me to Ener-G Holdings plc v Hormell [[2012] EWCA 1059]  in support of the proposition that notice requirements should be construed in favour of the beneficiary of the bargain.  That case was concerned with the issue of whether the specific requirements for serving notice had to be complied with.  The issue of the adequacy of the Call Option Exercise Notice under the Escrow Agreement cannot be reopened in these remission proceedings.  That case nevertheless is instructive as to how to approach the question of whether certain contractual procedures are permissive or exclusive.  The COA is governed by English law and the comments of Lord Justice Gross are apposite to the present case, where he said (at [58] and [60]) that certainty is important in commercial transactions, so that parties can know where they stand and act accordingly: but despite the desirability and importance of certainty, a good many commercial contracts are less tidy than might be desirable as a matter of strict theory.  In this respect, commercial contracts reflect the realities of commercial life.  It is thus no surprise to find in a commercial contract surplus language, for instance that which merely states the obvious.  Likewise, it is by no means uncommon to find that, whichever of two rival constructions is preferred, anomalies or apparent anomalies will remain.  The present arbitration is such a situation, where some anomalies remain with my interpretation of the COA.  But very much on balance (and I certainly do not agree with [the Defendant’s] submission that [the Claimant’s] interpretation is “commercial nonsense”), I have concluded that strict compliance with the Escrow Agreement was not indispensable for a valid exercise of the Call Option under the COA nor was the Escrow mechanism the only permissible means of Completion.”
14.	Mr Collins submits as follows: 
i)	He accepts that on the face of it the Arbitrator in paragraphs 101 – 102 puts forward two reasons for his conclusion that compliance with the provisions of the Escrow Agreement is not indispensable for exercise of the Call Option.  The first reason is the context and factual background of the SHA and COA, as described in paragraph 77, including that his “view of the evidence is that it was envisaged that [the Claimant] would be a short term investor”.  The second reason is that the construction which he prefers (that the Escrow procedures are permissive but not mandatory) is “also more consistent with business commonsense”.  However Mr Collins submits that it is significant that even with those two reasons the Arbitrator only made his decision “very much on balance”.  It is clear therefore in his submission that the Arbitrator’s reliance on the short term investor reason ‘tipped the balance’, and that without it he would or might not have decided as he did.  If he was not permitted to rely on that reason, then not only was that a serious irregularity, but it has caused the Claimant substantial and continuing injustice, because the court only needs to be satisfied that the Arbitrator “might realistically” have adopted a different course if there had been no serious irregularity: he relies on the MV Ocean Glory [2015] 1 Lloyd’s Law Rep 67 at paragraph 30 and Merkin Arbitration Law at paragraph 20.8.  If necessary he submits that in any event the ‘second reason’ is substantially dependent upon the ‘first reason’.  Mr Collins submitted that it would seem from the last sentence of paragraph 101 that even for the purpose of the business common sense argument the Arbitrator was assuming that the underlying bargain was the exercise of the option – i.e. assuming that it would occur.     
ii)	As to the ‘first reason’, the Arbitrator’s finding in paragraph 77 of the Second Award, upon which paragraph 101 is founded, is inconsistent with the finding of the UNCITRAL Tribunal in paragraph 187 of its Award.  The Arbitrator is not entitled, by reason of the Procedural Order No.1, set out in paragraph 6 above, to do other than accept the findings of the UNCITRAL Tribunal, and he has failed to do so.  By purporting to revisit the short term investor point after it had been disposed of by the UNCITRAL Award, by which in his First Award he rightly accepted he was bound, there was a clear excess of power because he made the finding in breach of the Procedural Order No.1, and Mr Collins relies upon Lesotho Development v Impregilo SpA [2006] 1 AC 221 at 29.  Hence the Arbitrator has reached a conclusion, upon which his finding as to the construction of the COA relied, namely that the Claimant was envisaged as a short term investor, which he had no jurisdiction or power to make, the UNCITRAL Tribunal, in his submission, having concluded in paragraph 187 of the Award that the Claimant was “entitled to be viewed as a medium term investor”.  The previous determination was, in Mr Collins’ submission, final and binding, and created an issue estoppel, leaving the Arbitrator functus officio, and deprived of any jurisdiction to reconsider the question of the Claimant’s status.  He relies so far as necessary upon Emirates Trading Agency LLC v Sociedade De Fomento Industrial Private Ltd [2015] EWHC 1452 (Comm) per Popplewell J at 26.  Further or in the alternative the Arbitrator went outside the remission to him by Field J, which was intended to leave unaltered all findings other than those specifically referred back.  It may be, Mr Collins suggested, that the Arbitrator, in referring, in paragraph 77 of his Second Award, to there having been “argument during the UNCITRAL Arbitration whether it was envisaged that [the Claimant] would be a short term or long term investor”, was overlooking that there had actually been a finding in that regard.            
iii)	In any event Mr Collins submits that the Arbitrator acted in breach of his duty under s.33 of the Act to act fairly, and thus committed a serious irregularity under s.68(2)(a), by failing to give the Claimant a reasonable opportunity of putting its case on the short term investor issue.  He relies on Omnibridge Consulting Ltd v Clearsprings (Management) Ltd [2004] EWHC 2276 (Comm) at 44 and the Ocean Glory at 25.  The ‘first reason’ was not one that was canvassed by the parties or by the Arbitrator during the hearing.      
iv)	Mr Weiniger did not accept that the UNCITRAL Tribunal made the finding as described by Mr Collins, as discussed below, and in answer to such submission Mr Collins developed the further argument to which I referred in paragraph 12 above.  He submitted that there was, or was also, a similar impermissible inconsistency between paragraph 184 of the UNCITRAL Award, in the last sentence of which the Tribunal recorded that the parties envisaged the exercise of the Call Option to be a “real possibility”, and paragraph 77 of the Second Award, whereby the Arbitrator concluded that it was more likely than not that such option would be exercised (“the less likely scenario was that [the Defendant] would decide not to exercise its option”. 
15.	Mr Weiniger responded as follows: 
i)	Mr Collins by his pernickety analysis of the words of the UNCITRAL Award and the Second Award falls into the trap identified by Bingham J in Zermalt Holdings SA v Nu-Life Upholstery Repairs Ltd [1985] 2 EGLR 14: 
“. . . as a matter of general approach, the courts seek to uphold arbitration awards.  They do not approach them with a meticulous legal eye endeavouring to pick holes, inconsistencies and faults in awards and with the objective of upsetting or frustrating the process of arbitration.  Far from it.  The approach is to read an arbitration award in a reasonable and commercial way, expecting, as is usually the case, that there will be no substantial fault that can be found with it.”
ii)	The UNCITRAL Award was addressing a different question from that determined by the Arbitrator.  The issue for the former was whether the disclosure of confidential information by the Defendant constituted a repudiatory breach, and the status of the Claimant was relevant to that question.  The issue for the Arbitrator was the construction of the COA so as to consider whether it was a mandatory requirement of exercising the option for there to be compliance with all the procedural provisions of the Escrow Agreement.  The Arbitrator did not challenge the finding of the UNCITRAL Tribunal, and did not ‘overlook’ it or that he was bound by it, not only, as he made expressly clear on more than one occasion in the First and Second Awards (as set out in paragraph 8 above, and also in paragraph 233 of his First Award), but as is manifest from the words of the last sentence of paragraph 77 of the Second Award: 
“In any event it was envisaged that while [the Defendant] and [the Claimant] remained joint shareholders, their relationship would be regulated by the SHA” [my underlining].  
iii)	 Mr Weiniger submitted that Mr Collins was taking the words of the UNCITRAL Award, upon which he relied, out of context, and failed to address important words in that context of which they formed part in paragraph 187, namely “the Tribunal considers that [the Claimant] was entitled to be viewed as a medium term investor . . . unless and until [the Defendant] validly exercised the Call Option” [my underlining].  Thus he submits that what the UNCITRAL Tribunal (of which the Arbitrator had formed part) was concluding was that the Claimant was to be viewed as a medium term investor in terms of the question of repudiatory breach of obligations owed to it by the Defendant so long as the relationship lasted (unless and until the Defendant exercised the Call Option).  That did not relate to the likelihood of the exercise of the Option.  It is clear that the Arbitrator was addressing the question of short term investor not in the context of repudiation, but in the context of the likelihood of exercise of the option.     
iv)	As to such likelihood, he points out that, significantly, both the UNCITRAL Award and the Second Award identified factors relevant to the likelihood of the exercise of the Option: the former in paragraph 184, pointing out that the (Schedule to the) COA set out what the payment to the Claimant would be for every day during the period for exercise of the Call Option, while in the latter the Arbitrator pointed out (at paragraph 101) that the Claimant is referred to in the COA as “the Investor”.  The two Awards expressed different views as to the likelihood of exercise of such options.  The UNCITRAL Award recorded in paragraph 184 that “the parties envisaged its exercise to be a real possibility”, while the Arbitrator recorded in paragraph 77 that “the less likely scenario was that [the Defendant] will decide not to exercise its option”.  But insofar as this constituted an inconsistency, it was not a material or relevant inconsistency, i.e. the degree of likelihood of exercise of the option was not a determination of an issue by the UNCITRAL Tribunal by which the Arbitrator was bound.  
v)	Consequently Mr Weiniger submitted that the Arbitrator lacked neither jurisdiction nor power to reach the conclusion he did.  As to the question of serious irregularity by way of unfairness, he accepted that the Defendant did not raise the question of short term investor, or indeed likelihood of exercise of the option, as an argument why the procedural provisions of the Escrow Agreement were not of the essence.  The Defendant did run the arguments set out persuasively and at some length in paragraph 101 and 102 of the Second Award, set out in paragraph 13 above, which were clearly accepted by the Arbitrator.  As for the ‘second reason’, it is plainly self standing.  He submitted that the kind of analysis given by Mr Collins to the last sentence of paragraph 101 (referred to in paragraph 14(i) above) particularly exemplified the approach deprecated by Bingham J discussed above, because the reference to the words ‘their underlying bargain, which in this case was transfer of the Option Shares’ must plainly mean in the context ‘the relevant part of their underlying bargain, which for these purposes was the exercise of the option’.  The Defendant’s contentions before the Arbitrator relating to frustration of bargain and permissive/exclusive use of contractual procedures were plainly good reason for the Arbitrator to find as he did.  Given the existence of the ‘second reason’, there was no substantial injustice to the Claimant (s.68) and in the Court’s discretion it should not set aside a well-justified determination (s.67): see Integral Petroleum SA v Melars Group Ltd  [2015] EWHC 1893 (Comm) at 26 per Andrew Smith J.           
16.	I am entirely persuaded in respect of the ‘first reason’ that there was no inconsistency between the Arbitrator’s conclusion and that of the UNCITRAL Tribunal, for the reasons given by Mr Weiniger.  The decision in relation to repudiatory breach was reflected by the position pending any exercise of the option, when the Claimant had to be viewed as a medium term investor, as the UNCITRAL Tribunal found: and the difference between the two Tribunals as to the precise likelihood of the option being exercised, whether it was a real possibility, or a better than 50/50 likelihood, was a conclusion, insofar as it reflected on the construction of the COA, to which the Arbitrator was free to come.  There was no excess of jurisdiction or power, no offence against issue estoppel and no exceeding of the issues remitted to the Arbitrator by Field J.    
17.	It is the case that the ‘first reason’, which I am satisfied was not interdependent with the ‘second reason’, was not put to or by the parties at the hearing, and hence that constituted a potential unfairness to the Claimant.  However I am satisfied that, although the Arbitrator made it clear that he found it a difficult decision, the matters which he elaborated at length in most of paragraph 101 and the whole of paragraph 102 of the Second Award were sufficient of themselves to justify the conclusion to which he came.  I am not persuaded that without the ‘first reason’ he might realistically have decided differently.  
18.	There is no ground for challenge to the Arbitrator’s conclusions in this regard.  
Clean Hands
19.	That disposes of the challenge to the declarations as to the validity of the exercise of the Call Option which the Arbitrator made in paragraph 166(a) of the Second Award.  However there is a challenge to the making of the specific performance order in paragraph 166(b) of the Second Award, on a very similar basis to that discussed above, namely that the Arbitrator in rejecting the Claimant’s case as to unclean hands was finding inconsistently with, and consequently failing to follow and be bound by, the conclusion of the UNCITRAL Tribunal, thus acting without jurisdiction alternatively without power.  
20.	The majority of the UNCITRAL Tribunal concluded that the Defendant was in repudiatory breach of the SHA.  I have set out the relevant passages (in paragraphs 197 and 210) in paragraph 7 above, in which the Defendant’s conduct is described as cynical and intentional and in complete disregard for the SHA.  As set out in paragraph 8 above, the Arbitrator recorded in the First Award that he would apply the same conclusions to the question before him as to whether there was repudiatory breach of the COA, to those applied to repudiatory breach of the SHA by the UNCITRAL Tribunal.  Indeed he made it clear in paragraph 248 of the First Award (there set out) that but for his conclusion that he was bound by the decision of the UNCITRAL Tribunal, he would not himself have found that the conduct of the Defendant described by the UNCITRAL Tribunal in the passages cited in paragraph 7 above was so egregious as to constitute fundamental breach.  
21.	The Arbitrator had to address in the Second Award what Mr Collins concedes to be a different question from the question of fundamental breach, namely whether the conduct of the Defendant was such as to disentitle it to equitable relief (and that there was sufficient nexus between the unclean hands and the relief sought).  The Claimant’s case was set out by the Arbitrator in paragraph 105 of the Second Award: 
“[The Claimant] submitted that [the Defendant] should not be granted specific performance because it (i) may not benefit from its own misconduct or else (ii) must come to equity with clean hands, which it does not.  This argument had also been raised in the first phase of the arbitration.  In its Post-Hearing Brief . . . [the Claimant]  contended that the Call Option was not exercised lawfully because it was preceded and made possible by service of a purported Call Option Exercise Notice in bad faith, fundamental breaches of the SHA, breaches of the COA, breaches of fiduciary duties, and repudiatory conduct.”
22.	Bad faith and taking advantage of its own wrong, dealt with in paragraph 106-111 of the Award, are no longer pursued.  The issue now addressed, described in paragraph 114 of the First Award as whether the Defendant “should be viewed as not having “clean hands” because of its repudiatory breach of the confidentiality provisions in the COA” were dealt with by the Arbitrator in paragraphs 112-113: 
“112.	[The Claimant] argued that [the Defendant] should not be granted the equitable relief of specific performance because it did not come with “clean hands” . . .  [The Defendant] responded that it does come with “clean hands” and in any event it must be shown that the conduct complained of has an immediate and necessary relation to the equity sued for (see e.g. Halsbury’s Laws of England, vol. 16(2), para 560; and Royal Bank of Scotland v Highland Financial Partners LP and ors [2012] EWHC 1278 and [2013] EWCA Civ 328). 
113.	The first question is, therefore, whether [the Defendant] has “clean hands”.  The majority of the UNCITRAL Arbitration Tribunal found that [the Defendant’s] conduct in breaching the confidentiality provisions of the SHA amounted to repudiation of the SHA justifying termination of the SHA, which analysis I reluctantly adopted, mutatis mutandis, in my First Award for the reasons explained therein (paras 223 and 248).  A decision not to grant specific performance of contractual rights when the applicant is otherwise entitled to that remedy should be made sparingly.  The decision whether or not to grant equitable relief is discretionary and should be based on my assessment of the conduct of [the Defendant], not the view of the majority of the UNCITRAL Arbitration Tribunal.  I do not share the opinion that [the Defendant] acted egregiously in talking to DUPD and, accordingly, in this Award where I have the opportunity to decide the Remitted Issues, I am not persuaded that I should decline to order specific performance.”
23.	Mr Collins submits that it is perfectly apparent that the Arbitrator was differing from the view of the majority of the Tribunal as to the egregiousness of the Defendant’s conduct, because he says so in terms in paragraphs 248 of the First Award (set out in paragraph 8 above) and in paragraph 113 of the Second Award set out above.  As he was bound by the UNCITRAL Tribunal’s findings, he was not entitled to do so.  
24.	Mr Weiniger once again emphasises that the issue which the Arbitrator was deciding in the Second Award was different from that decided by the UNCITRAL Tribunal in the UNCITRAL Award.  It is wholly apparent that the Arbitrator knew that he was bound by the UNCITRAL Tribunal’s finding as to repudiatory breach of the SHA, because he said so, and he also proceeded to apply loyally the same reasoning, so as to find that there was repudiatory breach of the COA.  But he was here addressing whether the conduct of the Defendant was sufficiently egregious as to amount to unclean hands.  There is the clearest possible exegesis of this point in the transcript of the remission hearing which is set out in full in the witness statement of Mr Kennelly on behalf of the Defendant at paragraph 51 (and also fairly referred to by Mr Kasolowky in paragraph 39 of his witness statement, and indeed the transcript itself is exhibited).  The difference between the issues could not be more clearly elucidated:      
“51(a)	At page 84, lines 1-5: “THE ARBITRATOR: So to the extent I am exercising a discretion, one might say it is more personal than the finding of breach sufficient to justify repudiation of the agreement, which was what I felt I was bound to decide and the basis of the agreement of the parties’; and 
       (b)	At page 88, lines 16-24 
“MR KASOLOWSKY: But the question really is not whether it is a fundamental breach to allow for discharge, the question is whether the breach is so bad that you should be exercising discretion. 
THE ARBITRATOR: Exactly, exactly. 
MR KASOLOWSKY: So I mean, there needs to be some kind of assessment of the severity of the breach. 
THE ARBITRATOR: Exactly, I completely agree, yes. 
MR KASOLOWSKY: Yes.”
25.	It would perhaps have been clearer if in paragraph 113, instead of his recording that he did not share the opinion of the majority of the UNCITRAL Tribunal (but was bound by it so far as the finding of repudiatory conduct is concerned) the Arbitrator had instead, or in addition, said “I am addressing a different question”.  But that is what he was doing and he was entitled to do so, and to reach the conclusion that the Defendant’s conduct did not amount to unclean hands, even if it constituted repudiatory conduct.  
26.	There is no need in those circumstances for me to deal with the additional case, which the Claimant would also need to have established in order to succeed on this point, namely the question of whether there was (as it is put in paragraph 114 of the Second Award) “sufficient nexus between the offending conduct and the benefit to justify depriving [the Defendant] of its contractual rights”.  If there were, as the Arbitrator concluded, and I have upheld, no unclean hands, then the nexus point does not arise.  But for the sake of completeness I should record that Mr Collins submitted that, if unclean hands had been established, the Arbitrator erred in the manner in which he addressed the issue of nexus.  Mr Collins submitted that, contrary to his obligations, as enunciated by (for example) Gloster J in SoeXimeX 
SAS v Agrocorp International Pte Ltd [2011] EWHC 2743 (Comm) at 19-20 and Gavin Kealey QC in Buyuk Camlica Shipping Trading & Industry Co Inc v Progress Bulk Carriers Ltd [2010] EWHC 442 (Comm) at 38, the Arbitrator failed to deal with what Mr Collins describes as the “fungibility issue”.  
27.	The contention in this regard was, as Mr Collins accepts, fairly described by the Arbitrator in paragraph 58 of the Second Award, in the context of the case made by the Claimant, that, although in the event the DUPD monies were not used to finance the Call Option, but the option price was to be funded, on the Defendant’s evidence, by accessing other monies i.e. from the sale of the O’Key Group, nevertheless without the DUPD monies the O’Key monies would have had to be used to fund other liabilities (met by the DUPD monies in the event) and would thus not have been available for the option price.  Paragraph 58 reads as follows: 
“[The Claimant] maintained that the evidence put forward by [the Defendant] in support of its assertion that it was unnecessary for it to receive the DUPD investment in order to pay the Call Option consideration is ambiguous at best and falls short of demonstrating that the DUPD had no effect on [the Defendant’s] ability to exercise the . . . Call Option.  The evidence indicates that [the Defendant] breached its confidentiality obligations in order to persuade DUPD to finance the Call Option.  DUPD monies that were ultimately earmarked for other projects and reduced [the Defendant’s] other obligations nevertheless meant that [the Defendant] had funds to pay the Call Option Price.”
28.	This argument was run also by reference to the “taking advantage of own wrong” case referred to in paragraph 22 above, and so the Arbitrator dealt with it in the section addressing that case, and then referred back to it.  The Arbitrator said as follows: 
“109.	[The Claimant] submitted that [the Defendant] was only in a position to exercise the Call Option because it had got funding from DUPD, in breach of the confidentiality requirements of the SHA.  [The Defendant] responded that in fact it had obtained the funds required to pay the Option Price from the IPO of the O’Key Group SA (in which Mr Teder had a beneficial interest) and not from DUPD. 
. . .
111.	. . . The evidence shows [the Defendant] was negotiating with DUPD for DUPD to finance the Option Price (see e.g. the DUPD Shareholders Agreement dated 10 September 2010, and press release on 13 September 2010).  However, I accept the uncontested evidence that by November 2010, [the Defendant] / Mr Teder had other sources of funding such as monies from the sale of O’Key Group to pay the Option Price.  Accordingly there is not sufficient nexus between the wrong and the benefit to justify depriving [the Defendant] of its contractual rights.
. . .
114.	Assuming, however, that I am wrong and [the Defendant] should be viewed as not having “clean hands” because of its repudiatory breach of the confidentiality provisions in the COA, then for the same reasons as wet out three paragraphs above, I find that there is not sufficient nexus between the offending conduct and the benefit to justify depriving [the Defendant] of its contractual rights.”
29.	I have no doubt at all that it cannot be said that the Arbitrator did not deal with or address the issue at all.  He is plainly, in paragraphs 111 and 114, rejecting the Claimant’s argument which he has set out in paragraph 58, quoted above.  The most that can be said is that he has not set out his reasoning in full for rejecting the Claimant’s contention, but it is clear that, even if that were so, inadequacy of reasoning does not begin to amount to a failure to deal with an issue within s.68(2)(d), and Mr Weiniger points to Hussmann (Europe) Ltd v Al Ameen Development & Trade Co [2000] 2 Lloyd’s Rep 83 at 56, Margulead Ltd v Exide Technologies  [2004] EWHC 1019 (Comm) at 42, Petrochemical Industries Company (KSC) v Dow Chemical Co [2012] 2 Lloyd’s Rep 691 at 16 and the helpful analysis by Akenhead J in Secretary of State for the Home Department v Raytheon Systems Ltd [2014] EWHC 4375 (TCC) at 33.  I agree.  
30.	I would therefore have rejected the challenge in respect of unclean hands in any event.  
The balance of the relief sought
31.	I referred in paragraph 11 above to what I call the “paragraph 168 point”.  In that paragraph of the Second Award, after making the declaration and the order for specific performance of the Call Option, the Arbitrator recorded: 
“I reserve jurisdiction to hear a claim by [the Defendant] for damages in lieu of specific performance arising from the purported transfer of [the Claimant’s] shares in Assofit to Althor Property Investments Limited and any subsequent transfer.”
This arose as a result of the discovery, only just prior to the Second Award, that the Claimant had, it seemed, transferred its shares in Assofit, which might render any order for specific performance nugatory.  The Claimant has challenged in these proceedings whether the Arbitrator would have any jurisdiction to hear such a claim, whether for damages in lieu of specific performance or indeed damages in addition to specific performance.  The paragraph is ambiguous, and the Defendant is content through counsel to accept what has in fact ensued, namely that the Arbitrator did not purport to assert jurisdiction, but was reserving the question of jurisdiction, and indeed the parties have taken part in subsequent proceedings, and there have been further awards and orders, with a view to a decision by the Arbitrator as to whether he has such jurisdiction.  By an Order dated 16 June 2015 he has directed that the issue of jurisdiction be tried together with the merits of the claims for damages.  Accordingly the parties have agreed that I do not need to address the paragraph 168 point upon the basis that it be read as if it had said what it seems the Arbitrator, and at any rate the Defendant, believed it to say, namely “I reserve the question as to whether I have jurisdiction”.  
32.	In an additional Arbitration Claim Form dated 16 January 2015 two further matters were raised by the Claimant, relating to paragraph 166(d) of the Second Award and paragraph 57(a)(ii) of a Fourth Award dated 19 December 2014, arising out of a further discovery namely that there has or may have  been disposition of Assofit’s interest in the Sky Mall; and relating to whether, under those paragraphs or otherwise, the further disclosure orders, which have in fact been made by the Arbitrator and at least partially complied with by the Claimant, could be made.  After hearing argument, and in particular being informed that the Arbitrator himself will be dealing with all questions of jurisdiction whether to make those orders or otherwise, I adjourn the issues raised by the second Claim Form, to be restored to this court if necessary after the further hearing or hearings before the Arbitrator.  
33.	With the exception of the issues thus agreed or adjourned, I dismiss the Claimant’s claims for relief under the Act.