March 2025 Legal Insights and Updates

In a recent ruling in Webster and others v Treloars Trust [2025] EWHC 516 (KB), the High Court denied an application for a Group Litigation Order (“GLO”) on behalf of 63 prospective claimants. These claimants, which included former students of Treloar’s College who had been infected with HIV and/or hepatitis through NHS blood products, were seeking to consolidate their claims against the relevant parties.

The court, however, determined that it would not be an appropriate use of its resources to approve the GLO, particularly as the claimants had yet to pursue claims under the government-funded Infected Blood Compensation Scheme (“IBCS”). The judgment emphasised that the compensation scheme, designed to provide financial support to victims, was the appropriate avenue for redress before resorting to legal action.

The case concerns individuals who were either directly affected by the infected blood scandal, such as former pupils, or were infected through contact with them, including estates or dependents. The applicants argued that the IBCS had not fully implemented the recommendations of Sir Robert Francis KC and Sir Brian Langstaff, Chair of the Infected Blood Inquiry (“IBI”). They also claimed that the compensation provided did not reflect the damages that would typically be awarded in litigation. Furthermore, they raised concerns that without holding the potential defendant accountable, similar incidents might occur in the future.

The claimants argued that the refusal to grant a GLO would result in numerous separate cases, each involving complex preliminary issues, which would likely increase costs and lead to inconsistent rulings. However, Senior Master Cook, who delivered the judgment of the court, found that a GLO would not help resolve the claims and was overly simplistic in addressing the issues at hand. He suggested that with proper cooperation and case management, many of the claims could be consolidated or managed together under standard court procedures, rendering a GLO unnecessary.

Master Cook also noted that, given the impending approval and implementation of the IBCS, which had been designed to offer comprehensive compensation to victims, it was unlikely that 63 claims would materialise. Evidence suggested that the IBCS provided advantages over litigation, including broader eligibility criteria and a "no-fault" approach to compensation. The court highlighted that claimants had not demonstrated they would receive less compensation through the IBCS than in successful litigation.

Furthermore, the court emphasised the need to promote alternative dispute resolution (“ADR”), noting that the IBCS itself served as a form of ADR. The court determined that it would not be appropriate to use judicial resources for the claims until the claimants had explored the IBCS as a first step. If the claimants could show that they had not been properly compensated under the scheme, their cases could be pursued under ordinary case management procedures.

This decision underscores the growing importance of alternative compensation mechanisms like the IBCS, which aim to provide quicker, more efficient remedies to victims, while reducing the burden on the court system.

The Courts and Tribunals Judiciary has released the Commercial Court Report for 2023-2024, revealing significant trends in arbitration-related claims in the English Commercial Court. Arbitration claims accounted for approximately 20% of the cases filed during this period, encompassing applications for injunctions, enforcement of awards, appointment of arbitrators and challenges under the Arbitration Act 1996 (“AA 1996”).

Notably, the number of applications for arbitral award challenges and injunctive relief has risen. For example, under Section 67 of the AA 1996 (lack of substantive jurisdiction), 24 applications were made, representing a 242% increase from the previous year. Of the eight applications determined, only one was successful. Section 68 (serious irregularity) saw 37 applications, a 37% increase, with the majority still pending or dismissed. Similarly, Section 69 (appeals on a point of law) recorded 52 applications, a 40% rise, with permission granted in only 10 cases. In addition to award challenges, applications for injunctions under Section 44 of the AA 1996 saw a 150% increase, with 50 applications made compared to 20 the previous year.

The report also notes the recent royal assent of the Arbitration Act 2025 but does not discuss the anticipated changes to the Civil Procedure Rules concerning Section 67 challenges. These statistics reflect the growing importance of arbitration-related applications in the English Commercial Court.

In Republic of Kazakhstan v World Wide Minerals Ltd and others [2025] EWHC 452 (Comm), the English Commercial Court upheld Kazakhstan's challenge to an investment treaty award under Section 68 of the Arbitration Act 1996. The Court found that the tribunal had failed to address a central issue, which amounted to a failure of due process under Section 68(2)(d), causing Kazakhstan substantial injustice.

The case arose from a London-seated investor-state arbitration concerning a mining investment. The tribunal had initially ruled in favour of World Wide Minerals (“WWM”), awarding damages based on a point not argued by WWM. This deprived Kazakhstan of the opportunity to address the issue. Kazakhstan successfully challenged the award and the Court remitted the matter to the tribunal to reconsider the issues of loss and causation.

The challenge to the second award involved the tribunal’s decision on those issues. A key point in the dispute was whether Kazakhstan’s breach of a management agreement led to the collapse of WWM’s investment, or if WWM’s failure to make payments would have caused the investment to fail regardless. Kazakhstan argued that the tribunal had not addressed this critical “counterfactual case” and therefore failed to deal with a key issue.

Bryan J, upholding Kazakhstan’s challenge, concluded that the failure to address the counterfactual case constituted a failure to deal with an essential issue required to reach a decision in the award. The tribunal had acknowledged the issue but failed to address it in its final ruling, instead offering only a brief mention in one sentence of a lengthy award. The judge emphasised that a tribunal's failure to address an issue vital to the resolution of the dispute amounts to a serious procedural error.

This ruling highlights the importance of due process in arbitral proceedings. It confirms that a failure to address central issues can result in the annulment of an arbitral award under Section 68 of the Arbitration Act 1996.

On 26 February 2025, the Ministry of Justice announced proposed increases to selected court and tribunal fees from April 2025.

Accordingly, the Court and Tribunal Fees (Miscellaneous Amendments) Order 2025 (SI 2025/351) (the “Order”), which was made on 13 March 2025 and laid before Parliament on 17 March 2025, will come into effect on 8 April 2025. This new order implements changes to court and tribunal fees, with the adjustments primarily aimed at reflecting the change in the Consumer Price Index (“CPI”).

In total, 171 fees will see an increase. Most fees will rise by 3.2% to align with the CPI change between March 2023 and March 2024. However, a smaller number of fees will increase by 13.5% to account for backdated inflation from March 2022.

Additionally, 24 fees will be reduced to better reflect the underlying costs. A full list of the changes is provided in the Schedule to the Order. These amendments follow the Ministry of Justice’s announcement on 26 February 2025 regarding proposed increases to court and tribunal fees, which will take effect on 8 April 2025.

The announcement sets out a full list of the fee changes, which include amendments to fees in the following fees orders:

• Civil Proceedings Fees Order 2008 (SI 2008/1053).

• Magistrates’ Courts Fees Order 2008 (SI 2008/1052).

• Family Proceedings Fees Order 2008 (SI 2008/1054).

• Non-Contentious Probate Fees Order 2004 (SI 2004/3120).

• Court of Protection Fees Order 2007 (SI 2007/1745).

In two related cases, Techteryx Ltd v Legacy Trust Company Ltd and others [2025] HKCFI 665 and Techteryx Ltd v Legacy Trust Company Ltd and others [2025] HKCFI 787, the Hong Kong Court of First Instance ruled that jurisdictional issues arising from fraud claims involving non-signatories to arbitration agreements should be deferred to the Singapore International Arbitration Centre (“SIAC”) for determination. The cases stemmed from a complex crypto dispute regarding the sale and purchase of a cryptocurrency business offering a “stablecoin” product.

The purchaser alleged fraudulent misrepresentation by the seller, claiming it was induced to acquire the business based on false assurances that sufficient reserves were held in escrow to back the digital tokens sold to investors. The seller initiated SIAC arbitration under the transaction documents, asserting the purchaser’s failure to meet payment obligations. However, the purchaser filed court proceedings in Hong Kong, alleging fraud and naming several defendants, including a financial adviser and an individual director of the seller.

The court cases involving the financial adviser and the individual defendant were contested with claims to arbitration. In the first case, the financial adviser argued that the court should decline jurisdiction over the purchaser’s claims because they were governed by a SIAC arbitration clause in an investment management agreement that predated the transaction, to which the purchaser was not a party. In the second case, the individual defendant applied for a stay of court proceedings, arguing that he could rely on the arbitration agreements in the transaction documents, even though he was not a signatory.

In both cases, the Hong Kong Court of First Instance deferred the jurisdictional issues to SIAC arbitration for resolution. In the first decision, the court determined that the purchaser was “arguably” bound by the arbitration agreement under Singapore law because it was acting as a beneficiary of a trust in its claims. The court rejected the argument that the arbitration agreement was void due to the alleged fragmentation of dispute resolution options, deferring this issue for consideration by the arbitral tribunal.

In the second decision, the court found that there was a prima facie case that the purchaser was bound by arbitration agreements under Delaware law, which applied to the transaction documents. The individual defendant, although a non-signatory, was entitled to rely on the arbitration clause due to his close relationship with the seller and the purchaser, with claims against him being closely tied to the contractual obligations under the transaction documents.

Both decisions highlight the complexity of disputes involving non-signatories to arbitration agreements, particularly in multi-party, multi-contract transactions. The court emphasised that while the decisions were preliminary, the arbitral tribunal would ultimately determine the scope of the arbitration agreements and jurisdiction. The decisions also suggest that parties seeking a stay of court proceedings must first convince the tribunal of its jurisdiction and may face challenges in defending any subsequent court challenges.

Additionally, the decisions reinforced that confidentiality concerns in arbitration-related court cases should be carefully considered, as the court did not find it necessary to rely on confidential arbitration details unless there were specific reasons to do so. This marks a key development in the handling of multi-jurisdictional arbitration disputes involving fraud claims and non-signatories.

In Decision 4A_466/2023, the Swiss Supreme Court upheld an arbitral award in which the tribunal declined jurisdiction over a Spanish-Venezuelan investor's claim against Venezuela under the Spain-Venezuela Bilateral Investment Treaty (“BIT”). The Court affirmed the tribunal's decision, determining that the claimant's dominant and effective nationality was that of Venezuela, as the BIT did not address the issue of dual nationality.

The case involved Raimundo Santamarta, a dual national of Spain and Venezuela, who sought damages for the expropriation of his family's pharmaceutical businesses. The Geneva-seated UNCITRAL tribunal declined jurisdiction, concluding that Santamarta’s dominant nationality was Venezuelan, making him ineligible to bring a claim against Venezuela under the BIT. Santamarta challenged the award, arguing that the tribunal had improperly added a condition not present in the BIT, asserting that Spain and Venezuela could have excluded dual nationals from BIT protection if that had been their intention.

The Swiss Supreme Court addressed this issue by emphasising that the BIT’s silence on dual nationality could not be interpreted as permitting or excluding claims by dual nationals. The Court highlighted the importance of applying the principles of international law in the absence of specific treaty provisions. It confirmed the arbitral tribunal’s interpretation, which found that customary international law on diplomatic protection, including the principle of dominant and effective nationality, was relevant to fill the gap in the BIT regarding dual nationals.

The Court also underscored that the BIT’s dispute resolution mechanism, allowing for arbitration under UNCITRAL rules when ICSID arbitration was unavailable, did not imply that dual nationals were excluded from arbitration under these rules. Importantly, the Court noted that the issue of dual nationality should be resolved based on international law principles, with the tribunal’s findings on the claimant's effective nationality being a matter of law that could be reviewed by the Court.

In its decision, the Court provided general guidance on how treaties should be interpreted when silent on dual nationality, confirming that the principle of dominant and effective nationality is a recognised international law rule applicable in investment protection cases.

This decision marks the Swiss Supreme Court’s first ruling on the contentious issue of whether dual nationals are entitled to sue their home state under an investment treaty when the treaty is silent on the matter. It emphasises the role of international law in filling gaps within bilateral treaties, especially in cases involving dual nationals.

The Chartered Institute of Arbitrators (“CIArb”) has introduced its Guideline on the Use of AI in Arbitration (2025) (the “Guideline”), designed to support arbitration participants in integrating artificial intelligence (“AI”) into their processes while safeguarding the integrity of arbitration proceedings. The Guideline complements applicable laws, regulations and arbitration rules, aiming to help users leverage AI's advantages while minimising risks to due process, fairness and the enforceability of awards.

The Guideline is divided into four sections. The first section explores the advantages and risks of using AI in arbitration, while subsequent sections provide general recommendations and cover the use of AI by both parties and arbitrators. It also includes a template agreement for party use of AI tools, along with two template procedural orders to help arbitral participants incorporate AI into their proceedings effectively.

One of the key principles in the Guideline is party autonomy. It acknowledges that parties have the freedom to agree on whether and how AI tools can be used, subject to mandatory laws or regulations. In cases where the parties disagree on the use of AI, the tribunal can make a decision, considering various factors such as the potential impact on evidence, fairness, equality of arms, confidentiality and the specific characteristics of the AI tools, including their data quality, accuracy, bias and security.

The Guideline outlines the powers of arbitrators to require the disclosure of AI tool use if it may affect evidence or the outcome of the arbitration. Arbitrators are also empowered to appoint AI experts to help them understand AI tools and their implications. It notes that tribunals cannot regulate the “private use of AI by parties”, as long as such use does not interfere with the proceedings or compromise the integrity of the arbitration.

In determining whether AI-assisted or AI-generated content should be included in the record, arbitrators are encouraged to verify that the source data for the machine-generated content is part of the record. They may also request the parties to clarify how the inputs to the AI system are connected to the outputs it produces.

Arbitrators can utilise AI themselves to enhance the accuracy and efficiency of processing information but must independently verify the information obtained through AI tools. Importantly, the use of AI should not replace legal analysis, research, or the interpretation of facts and law, as it could unduly influence procedural or substantive decisions. The guideline encourages arbitrators to consult with the parties and fellow tribunal members before incorporating AI into their decision-making processes.