May 2025 Legal Insights and Updates

In a significant ruling, the English High Court has clarified the relationship between competing dispute resolution clauses, particularly in cases where a settlement agreement follows earlier contracts with arbitration provisions. In Destin Trading Inc v Saipem SA [2025] EWHC 668 (Ch), the court dismissed an application to stay court proceedings under Section 9 of the Arbitration Act 1996.

The Court ruled that a new exclusive jurisdiction clause in a settlement agreement superseded earlier arbitration clauses in prior contracts. This decision confirms that when parties settle prior disputes through a new agreement, the jurisdiction clause in the settlement agreement will typically govern any related disputes, unless the intention to maintain prior arbitration clauses is explicitly stated.

Key Practical Takeaways

This case provides authoritative guidance on the interaction between competing dispute resolution clauses, particularly where a settlement agreement follows prior contracts with arbitration provisions. The court restated a commercially pragmatic approach: when parties enter into a later agreement to settle prior disputes and include a new jurisdiction clause, that clause will likely govern all related disputes as we advance, unless expressly carved out.

This has several implications in practice. First, when advising on settlement agreements, it is essential to consider whether parties intend to displace prior arbitration provisions. If not, the settlement terms must make that intention explicit. Second, this case underscores the importance of precise drafting. Broad jurisdiction clauses in settlement or termination agreements may unintentionally override previously agreed arbitral mechanisms, especially where the claims. However, referencing earlier contracts arises from misrepresentation or other issues tied to the settlement.

This decision also highlights the court’s willingness to prioritise procedural efficiency and avoid fragmented dispute resolution. It aligns with the judicial preference for ‘one-stop adjudication’, reducing the risks of inconsistent outcomes and promoting coherent dispute management strategies.

Case Background

Destin Trading Inc (“Destin”) and Saipem SA (“Saipem”) had a long-standing commercial relationship involving offshore oil and gas projects in Africa. Their dealings were governed by several frame agreements (the “Frame Agreements”), each of which incorporated Saipem’s general terms and conditions including an ICC arbitration clause seated in London. Disputes later arose regarding unpaid invoices, particularly under the ‘Congo River Crossing Project’, and in 2013 the parties entered into a settlement agreement (the “Settlement Agreement”). The Settlement Agreement included an exclusive jurisdiction clause in favour of the English courts and expressly terminated the previous Frame Agreements and released both parties from future claims arising from them.

In 2024, Destin brought a claim in the English courts, alleging it was induced to enter the Settlement Agreement by misrepresentations. Destin sought rescission of the Settlement Agreement and claimed restitution and damages. Saipem applied to stay Destin’s monetary claims under Section 9 of the Arbitration Act 1996 arguing that those claims arose under the Frame Agreements and had to be brought in ICC arbitration.

Court’s Decision

Andrew Lenon KC, sitting as a Judge of the High Court, refused to stay the proceedings. He held that the monetary claims, although referencing sums due under the earlier Frame Agreements, were in substance claims for deceit and restitution arising from the Settlement Agreement. The governing dispute resolution clause was therefore Clause 10 of the Settlement Agreement, which conferred exclusive jurisdiction on the English courts.

The court applied the reasoning in Monde Petroleum SA v Westernzagros Ltd [2015] EWHC 67 (Comm) (“Monde”) by analogy, noting that while Monde involved a termination agreement, similar principles apply to settlement agreements. When a settlement agreement is intended to bring earlier agreements (and related claims) to an end and contains a dispute resolution clause inconsistent with prior clauses, it will generally be construed as having a superseding or overriding effect. This reflects a shift in the ‘centre of gravity’ of the parties’ relationship to the settlement agreement itself.

The court rejected Saipem’s contention that the arbitration clauses in the Frame Agreements survived termination. It found that the parties intended to displace those clauses by agreeing to (among other things) the exclusive jurisdiction provision, an entire agreement clause and the express termination of the Frame Agreements, in the Settlement Agreement. Even applying the two-stage test from Mozambique v Privinvest [2023] UKSC 32 in alternative to Monde, the court held that Destin’s monetary claims were concerned with claims for damages for deceit inducing the Settlement Agreement, not claims under the earlier Frame Agreements. The stay application was therefore dismissed.

Conclusion

This ruling provides important guidance on the interaction between dispute resolution clauses in settlement agreements and earlier arbitration clauses. It is important to ensure that settlement agreements clearly outline the intended dispute resolution mechanisms to avoid potential conflicts with earlier agreements, particularly in complex commercial relationships.

On 12 May 2025, the UK government published its Immigration White Paper outlining a series of significant reforms aimed at reducing net migration and restoring control over the UK borders. The measures presented are designed to reshape the immigration system, prioritising those who contribute most to economic growth. Key provisions include changes to the Skilled Worker route, adjustments to social care recruitment, restrictions on international student post-study work and stronger measures against immigration abuse.

Below are the summaries of key provisions from the 82-page document, “Restoring Control over the Immigration System”.

Raising the Skilled Worker Threshold

One of the main reforms includes raising the threshold for Skilled Worker visas, which will now be limited to those with qualifications at RQF 6 (graduate level) or above. This change also comes with higher salary thresholds and the immigration salary list, which previously allowed discounts on these thresholds, will be abolished. Access to the points-based immigration system will now only be available to occupations experiencing long-term shortages. The Migration Advisory Committee will play a critical role in determining whether these shortages are justified. In addition, employers seeking to recruit from abroad will be required to demonstrate a commitment to increasing recruitment from the domestic workforce.

Changes to Adult Social Care Recruitment

As part of wider reforms to reduce reliance on international recruitment, the government will end social care visas to new applicants from abroad. This measure is intended to encourage a shift towards boosting domestic workforce training. However, during a transition period until 2028, individuals already in the country under the social care visa will be allowed to extend their visas or switch their status within the UK. This approach will be kept under review.

International Student & Study Visa Reforms

The Immigration White Paper outlines stricter requirements for sponsoring institutions that wish to recruit international students. The government will introduce new interventions for sponsors who are nearing non-compliance, including action plans and limits on the number of new international students they can recruit while on these plans. Additionally, the ability for graduates to remain in the UK after completing their studies will be reduced to a period of 18 months.

Family & Dependants

The White Paper aims to simplify the complicated family and private life immigration processes. New legislation will make it clear that the government and Parliament, rather than the courts, will decide who should have the right to remain in the UK. This reform addresses concerns where Article 8 (the right to family life) is used to delay deportation in cases where removal is clearly in the public interest.

Encouraging Highly Skilled Workers & Economic Growth

The government states it is committed to attracting and retaining the brightest global talent. This includes introducing fast-track routes for highly skilled individuals in key sectors, such as science, technology and design. The White Paper also proposes increasing the number of places in schemes for research interns and reviewing the Innovator Founder visa and Global Talent visa to ensure that they better serve the UK economy.

Tackling Immigration Abuse

Stronger measures will be implemented to tackle immigration abuse and visa misuse. New policies will target individuals claiming asylum when conditions in their home countries have not materially changed. Tighter visa controls and restrictions will be applied where there is evidence of abuse. Furthermore, the government will implement innovative financial measures, penalties and sanctions for sponsors of migrant workers or students where abuse is evident.

Reforming Deportation for Foreign National Offenders

A significant reform concerns the deportation system for foreign nationals convicted of crimes. The Home Office will now be informed of all foreign nationals convicted of criminal offences, not just those incarcerated. The deportation thresholds will also be reviewed to ensure that more factors are considered, particularly those involving violence against women and girls.

English Language Requirements

As part of the government's effort to ensure better integration of migrants into British society, the Immigration White Paper introduces new English language requirements for a broader range of immigration routes. These requirements are designed to ensure that migrants can effectively communicate and participate in the social, economic and cultural life of the UK.

New English language requirements include demonstrating proficiency in the English language for both main applicants (those applying for a visa or immigration status) and their dependants (family members accompanying them). The exact level of proficiency needed will depend on the immigration route but will be assessed over time, allowing for gradual improvement.

These new requirements reflect a broader shift in UK immigration policy, focusing not just on immigration but also on successful integration. By ensuring a better command of the language, the government aims to reduce language barriers and improve opportunities for social mobility, employment and community involvement.

Citizenship and Settlement

In addition to the English language reforms, the White Paper proposes significant changes to the processes surrounding settlement and citizenship:

• Doubling the Qualifying Period for Settlement: Currently, the standard qualifying period for settlement (the period after which individuals can apply for indefinite leave to remain) is typically 5 years for those on certain visa routes. Under the new proposals, this period will be doubled to 10 years. This means that migrants will need to wait longer before they can apply for permanent settlement in the UK.

• Expanded Points-Based System for Settlement and Citizenship: The government is also planning to expand the points-based immigration system to cover both settlement and citizenship applications. This expansion will mean that, in addition to meeting specific criteria for work and skill levels, applicants for both settlement and citizenship will need to demonstrate their contributions to the UK, such as their ability to integrate, contribute to the economy and respect UK laws.

This change reflects the government's broader vision of immigration that prioritises individuals who have made a positive and lasting contribution to the UK. By requiring a longer period for settlement and applying the points-based system to both settlement and citizenship, the UK seeks to ensure that those seeking permanent residence or citizenship are well-integrated and have consistently met the required standards.

Next Steps and Further Reforms

These reforms are part of the UK government’s Plan for Change and will be rolled out gradually throughout the course of this Parliament. The first changes are expected in the coming weeks, with additional reforms focusing on the asylum system and border security expected later this summer. The measures outlined in the White Paper are designed to create a more structured and controlled immigration system, focused on skills, domestic workforce training and addressing immigration-related challenges.

In a judgment that aligns with the stance taken by the Dubai International Financial Centre (“DIFC”) Court of Appeal in Carmon, the Abu Dhabi Global Market (“ADGM”) Court of First Instance (“ADGMCFI”) has confirmed its jurisdiction to issue Worldwide Freezing Orders (“WFOs”). This authority extends not only to court litigation but also in support of foreign arbitral award enforcement under the 2015 ADGM Arbitration Regulations (as amended).

The ADGMCFI specifically ruled that the requirement of personal jurisdiction over the defendants or the need for service of proceedings does not limit its jurisdiction to grant a WFO. The court also clarified that it can issue a WFO even against individuals who are not directly involved in the applicant’s claim, judgment or potential judgment - this refers to the Chabra jurisdiction. The ruling emphasises the court’s broad authority to support international arbitration enforcement, marking a significant development in the ADGM's approach to cross-border legal matters.

Key Practical Takeaways

This ruling offers valuable clarity regarding the jurisdiction of the ADGM Courts to issue WFOs. In his judgment, Justice Sir Andrew Smith highlights the distinct features of the ADGM legal system and explains why certain principles of English law may not always apply to the ADGM Courts. The judgment’s endorsement of the DIFC Court of Appeal's decision in Carmon and the emphasis on the comity principle between the DIFC and ADGM Courts provides confidence to practitioners working across both jurisdictions.

For those considering where to enforce an arbitral award, the case reinforces the ADGM Courts' openness to granting WFOs even when neither party is based in the jurisdiction and without the requirement for service of proceedings, especially when the award debtor’s assets are located outside the ADGM. Additionally, the case provides valuable insights into the type of conduct the ADGM Courts may consider when issuing WFOs. This includes instances where the award debtor attempts to frustrate the payment of an award or where there is a risk of assets being concealed or their value diminished to hinder the award creditor’s ability to recover funds.

Case Background

The case arose from an arbitration conducted under the London Court of International Arbitration Rules, involving a claimant company based in onshore Abu Dhabi and two Cypriot companies as the first and second respondents. The claimant was awarded in its favour against the respondents but the award remained completely unsatisfied as the time limit to challenge the award had expired. The claimant subsequently initiated proceedings against the respondents, including a third respondent incorporated in the ADGM, with all three respondents being part of the same corporate group.

Before the ADGM proceedings were initiated, the respondents attempted to block enforcement of the award by filing bankruptcy proceedings through a group company in Delaware. These proceedings were dismissed, as they were found to have been filed in bad faith. In the ADGM Court, the claimant successfully made an ex parte application for a WFO to freeze the respondents' assets. Simultaneously, the claimant applied for an order for the recognition and enforcement of the award, which was granted, subject to the respondents' application to set aside the award.

The respondents then made two applications that were the focus of Mr Justice Sir Andrew Smith's judgment:

• A request for a declaration that the court had no jurisdiction to issue the WFO, along with a discharge of the WFO.

• A request for a declaration that the court should not have exercised its jurisdiction to grant the recognition and enforcement order and sought to have it set aside.

Court’s Decision

The ADGMCFI dismissed both of the respondents’ applications in this case. Specifically, it rejected the respondents’ challenge to the WFO, reinforcing its earlier jurisprudence, including the case of Abu Dhabi Commercial Bank PJSC v Bavaguthu Raghuram Shetty [2021] and the DIFC Court of Appeal decision in Carmon.

The court confirmed that its jurisdiction to grant a WFO was derived from Article 13 of Law No. 4 of 2013 (the Founding Law), in conjunction with various sections of the ADGM Courts Regulations and the ADGM Court Procedure Rules. It emphasised that the jurisdiction to issue a WFO was an inherent power of the court, particularly in cases involving the recognition and enforcement of New York Convention arbitration awards under the Arbitration Regulations.

The court also highlighted key distinctions between the ADGM Courts and the English Courts. Unlike English courts, the ADGM Courts' jurisdiction is not contingent on personal jurisdiction over the defendants or the need for service of proceedings. Additionally, the real connecting link requirement between the subject matter and the jurisdiction did not apply in this case, as it was outside the scope of the UK Civil Jurisdiction and Judgments Act 1982.

In issuing the WFO, the ADGMCFI followed the guidelines set out in Convoy Collateral Ltd v Broad Idea International Ltd [2021], confirming that the freezing order could be made if there was a judgment or order for a payment that could be enforced, if the respondent had assets and if there was a real risk of the respondent dissipating those assets.

The court's WFO included a restriction on the respondents' subsidiaries, preventing the disposal or devaluation of assets that could be used to satisfy the award. While not a common practice, this was justified by evidence showing that the respondents had transferred shares to avoid paying the award.

Moreover, the ADGMCFI invoked Chabra jurisdiction, allowing the WFO to be issued against a person with no direct claim or judgment against them. The court clarified that to secure such an order, the applicant must demonstrate:

• Reasonable belief that the respondent possesses assets subject to the injunction.

• The assets are enforceable by the court and could satisfy a future judgment.

• There is a real risk that the respondent will dispose of assets to prevent satisfaction of the judgment.

The court confirmed that Chabra jurisdiction aligned with the Founding Law, as the WFO was issued to assist in enforcing the arbitral award, not as a judgment in the foreign jurisdiction. In relation to the respondents’ set-aside application, the ADGMCFI highlighted the claimant’s duty to make full and frank disclosure when applying for recognition or enforcement of an arbitral award.

The court noted that even if a failure to disclose did not automatically invoke public policy considerations under the Arbitration Regulations, the court retained the authority to set aside an improperly obtained order. Since the respondents did not prove the non-disclosure claim, the set-aside application was dismissed.

Conclusion

The ADGM Court of First Instance’s decision in A17 v B17, C17, and Others underscores the broad jurisdictional authority of the ADGM Courts to grant WFOs, even in cases where personal jurisdiction over the defendants is absent and without the need for service of proceedings. This ruling clarifies the application of the Chabra jurisdiction, allowing freezing orders to be issued against third parties without a direct claim, provided there is evidence of a real risk that assets will be dissipated to frustrate a potential judgment.

The court’s alignment with the DIFC Court of Appeal's reasoning and its emphasis on the comity principle between the ADGM and DIFC Courts reflects a coherent approach to cross-border dispute resolution in the UAE’s financial free zones. The case also highlights the importance of precise disclosure when seeking enforcement orders and the court's power to set aside orders if improper non-disclosure is proven.

This ruling marks a significant development in the ADGM's approach to international arbitration enforcement, reinforcing its role as a key player in global dispute resolution. The court’s decision ensures that arbitration creditors have effective recourse to protect their awards, even in complex cross-jurisdictional situations.

In a significant ruling, the Versailles Court of Appeal addressed the statute of limitations for applications seeking leave to enforce international arbitral awards in France. This decision stemmed from a case where the claimant initially filed for leave to enforce an arbitral award in 2016, but withdrew the request in 2017 due to an anti-suit injunction from the New York Supreme Court. The claimant later refiled the request in November 2018, which was granted. However, Citigroup Global Market Inc and one of its bankers (the respondents) appealed the decision to the Paris Court of Appeal, which dismissed their appeal. The French Supreme Court subsequently overturned the decision and remanded the case to the Versailles Court of Appeal.

Ultimately, the Versailles Court of Appeal ruled that a five-year statute of limitations applies to applications for leave to enforce foreign arbitral awards in France, starting from the date the award is issued.

Key Practical Takeaways

This ruling has important implications for the enforcement of foreign arbitral awards in France:

• Five-Year Limitation Period: The court confirmed that the five-year limitation period outlined in Article 2224 of the French Civil Code applies to exequatur proceedings for arbitral awards. This means that the request to enforce an arbitral award is considered a personal and movable action subject to the general statute of limitations.

• Interruption of the Limitation Period: The court noted that the statute of limitations can be interrupted by enforcement or conservatory measures under Article 2244 of the French Civil Code. However, if the claimant chooses to lift these measures, the interruption is nullified and the statute of limitations would begin from the date the award was issued.

• Distinction Between Arbitral Awards and Foreign Judgments: The court clearly distinguished between the limitation period for enforcing arbitral awards and that for enforcing foreign judgments. Foreign judgments are not subject to a statute of limitations in France but are instead governed by the limitation period in the jurisdiction of the original court. This rule does not apply to arbitral awards, as they are considered autonomous from the laws of the state of origin. Therefore, enforcing arbitral awards in France cannot be exempt from a time limitation, as this would violate French international public policy.

Case Background

The dispute arises from a management contract related to the claimant’s investment portfolio, valued at approximately US$25 million. In 2010, the claimant initiated arbitration proceedings under the FINRA dispute resolution centre in the United States, seeking compensation for financial losses incurred during the 2008 subprime crisis, alleging mismanagement by the respondents.

On 30 July 2013, the arbitral tribunal issued a FINRA arbitral award in favour of the claimant, ordering the respondents to compensate for the losses. However, on 2 January 2014, the New York Supreme Court set aside the award, ruling that the underlying claim had been settled between the parties on 29 April 2012. Despite this, on 30 March 2016, the claimant requested and obtained an order from the Paris First Instance Court to enforce the award in France. The claimant then took conservatory attachments on the respondents' assets based on this order. On 29 September 2016, the respondents challenged the order granting leave to enforce.

At the same time, on 18 January 2017, the respondents obtained an anti-suit injunction from the New York Supreme Court, which ordered the claimant to cease any enforcement actions related to the award in France. Consequently, on 13 February 2017, before the Paris Court of Appeal, the claimant waived the benefit of the enforcement order and lifted the conservatory attachments.

However, on 6 November 2018, the claimant filed a new request with the Paris First Instance Court to enforce the award again, which was granted on 21 December 2018. The respondents appealed the decision and simultaneously obtained a new order from the New York Supreme Court, which included an order for the claimant's imprisonment until the claimant withdrew the legal action in France.

On 12 July 2021, the Paris Court of Appeal dismissed the respondents' appeal, ruling that an appeal against an order granting leave to enforce is only permitted in the limited circumstances set out in Article 1520 of the French Code of Civil Procedure. The respondents then appealed to the French Supreme Court, which overturned the Paris Court of Appeal’s decision. The Supreme Court held that Article 1520 only applies to the review of the arbitral award itself and does not prevent the examination of any pleas of inadmissibility raised in relation to the leave application for enforcement. The case was then remanded to the Versailles Court of Appeal.

The respondents contended that the claimant’s new request for leave to enforce, filed on 6 November 2018, was inadmissible for three main reasons: (i) the claimant had waived the benefit of the first enforcement order on 13 February 2017; (ii) the request was time-barred; and (iii) the claim had already been settled by the parties on 29 April 2012.

Court’s Decision

The court ruled that the request for leave to enforce the arbitral award was time-barred under Article 2224 of the French Civil Code, deeming the claimant's application inadmissible.

First, the court rejected the claimant’s argument by drawing a distinction with the exequatur applications for foreign judgments. Under French law, foreign judgments are not subject to a statute of limitations as long as they remain enforceable in their jurisdiction of origin. However, such judgments are indirectly constrained by the limitation rules in their country of origin. In contrast, the court emphasised that arbitral awards are autonomous and independent from the national laws of the country where the award was made, as established in the Putrabali case. Therefore, the limitation periods imposed by the laws of the country where the award originated cannot be applied to oppose enforcement in France.

The court further noted that extending the reasoning from the 11 January 2023 decision (which excluded time limits for foreign judgments) to arbitral awards would contradict French international public policy. It concluded that arbitral awards must be subject to a statute of limitations when seeking enforcement in France.

Second, the court confirmed that the general statute of limitations under Article 2224 of the French Civil Code applied to requests for leave to enforce an arbitral award. The court excluded the application of Article L 114-4 of the French Code of Civil Enforcement Procedure, which imposes a 10-year limitation period on the enforcement of enforceable titles. Since an arbitral award awaiting enforcement does not qualify as an enforceable title, the court ruled that the five-year limitation under Article 2224 applied, starting from the issuance of the arbitral award.

Thus, the court held that two limitation periods apply to the enforcement of arbitral awards: five years from the issuance of the award to request leave to enforce and ten years from the order granting leave to enforce the award.

Lastly, the court dismissed the claimant's attempt to rely on 2016 conservatory attachments as an interruption to the limitation period. While enforcement measures generally interrupt the statute of limitations, the claimant’s decision to waive the benefit of the initial leave order and lift the conservatory attachments in 2017 nullified any interruption of the limitation period. Consequently, the court ruled that the 2018 request for leave to enforce was time-barred, as the award had been issued in 2013, more than five years prior.

Conclusion

The Versailles Court of Appeal’s decision in this case establishes a clear framework for the statute of limitations applicable to exequatur proceedings for foreign arbitral awards in France. The court’s ruling highlights the distinction between arbitral awards and foreign judgments, confirming that arbitral awards are not exempt from time limitations, unlike foreign judgments, which are governed by the rules of the country of origin. This decision reinforces the importance of timely enforcement requests, as the court emphasised that the five-year limitation period for filing a request to enforce an arbitral award must be adhered to.

The court’s ruling also clarifies the interaction between conservatory measures and the statute of limitations, affirming that actions such as waiving an enforcement order can nullify any interruption of the limitation period. Ultimately, the decision underscores the need for careful attention to statutory timeframes when pursuing the enforcement of arbitral awards, ensuring that legal actions are initiated promptly and in compliance with French law.

In a significant ruling, the Court of Appeals of the State of São Paulo reversed a first-instance judgment and annulled an arbitral award, determining that one of the co-arbitrators had failed to disclose that he had previously served on another arbitral panel alongside an attorney representing the winning party. The court stated that under Brazilian law, the duty of disclosure for arbitrators is objective and continuous. Failure to disclose facts that could raise a reasonable doubt about an arbitrator’s impartiality and independence was found to be enough to invalidate the award, even in the absence of proof of actual bias.

This ruling is notable for arbitration professionals, as it comes at a time of increased attention on arbitrators’ disclosure obligations in Brazil, highlighting the importance of full transparency in arbitration proceedings.

Key Practical Takeaways

The decision in Orion v Engie has significant practical implications particularly regarding the duty of disclosure for arbitrators. The Brazilian Arbitration Act (Federal Law No 9,307/1996) mandates that arbitrators disclose any facts that may create reasonable doubts about their impartiality and independence. In this case, the court reaffirmed that arbitrators’ duty of disclosure is both objective and continuous. Even in the absence of actual bias, failure to disclose relevant facts can invalidate an arbitral award.

Brazilian courts have taken varying positions on what constitutes “justified doubts” regarding impartiality. Factors such as the availability of information, parties’ duty to cooperate and whether parties are required to independently investigate arbitrators contribute to this uncertainty. The Orion v Engie case reinforces the need for clear and broad disclosures by arbitrators and reflects a growing trend among Brazilian courts to enforce these obligations more strictly. The court highlighted several key points in this case:

• Inconsistencies in Disclosure: The court was influenced by the inconsistency in the arbitrator’s successive disclosures, which raised concerns about trust.

• Disclosure of Interactions with Counsel: Arbitrators may be required to disclose prior relationships with parties’ counsel if those relationships are relevant to assessing their suitability.

• Excessive Disclosure: The court endorsed the idea that arbitrators should err on the side of over-disclosure, leaving it to the parties to decide the relevance of the disclosed information.

• Publicly Available Information: Even if the information is in the public domain, the duty to disclose still applies, as such information may still influence the parties' perception of an arbitrator’s suitability.

This ruling aligns with a prior decision in which the court annulled an arbitral award due to an undisclosed professional connection between the arbitrator and a party’s counsel. The court focused on the frequency and significance of the interactions and how the lack of disclosure interfered with the affected party’s right to make an informed decision. ruling is notable for arbitration professionals, as it comes at a time of increased attention on arbitrators’ disclosure obligations in Brazil, highlighting the importance of full transparency in arbitration proceedings.

The Orion v Engie decision is especially significant amid ongoing debates and legislative efforts to clarify the duty of disclosure in Brazil. The Brazilian Supreme Federal Court is reviewing a constitutional suit on the matter and the Brazilian Congress is discussing a bill (Bill No 3,293/2021) that could modify the country’s Arbitration Law. The Brazilian Arbitration Committee (“CBAr”) has also issued guidelines on this topic.

Ultimately, Orion v Engie adds another important layer to Brazil’s evolving case law on arbitrators’ duty of disclosure. Arbitration practitioners in Brazil should pay close attention to this case and its implications. However, it is essential to note that the decision is still under appeal to the Superior Court of Justice (“STJ”), which will have the final say on this matter.

Case Background

The dispute between Engie and Orion arose from an arbitration administered by the FGV Mediation and Arbitration Chamber. Engie won the arbitration, with the arbitral tribunal issuing an award in Engie’s favour in March 2022.

After the arbitration concluded, Orion allegedly discovered that one of the co-arbitrators appointed by Engie had previously worked with one of Engie’s attorneys in another arbitral tribunal. This relationship, which the co-arbitrator had not disclosed, raised concerns for Orion. Specifically, Orion argued that the co-arbitrator had played a role in the appointment of Engie’s attorney as the president of the earlier tribunal.

As a result, Orion filed a lawsuit in the lower courts of the State of São Paulo, seeking to annul the arbitral award. Orion contended that the co-arbitrator’s failure to disclose this past relationship (i) prevented Orion from fully understanding and raising objections regarding the connection between the two professionals and (ii) created a breach of trust and justified doubt regarding the co-arbitrator’s impartiality and independence.

In its defence, Engie argued that: (i) under Brazilian law and the IBA Guidelines on Conflicts of Interest in International Arbitration, arbitrators were not required to disclose previous joint service with counsel for one of the parties; (ii) the prior arbitration had concluded before the Engie-Orion arbitration began; (iii) the situation did not create a justified doubt about the co-arbitrator’s impartiality; and (iv) the facts Orion discovered were publicly available even before the arbitration was initiated.

Court’s Decision

The lower court (first-instance judge) rejected Orion’s attempt to annul the arbitral award. The court ruled that: (i) the information Orion discovered was publicly available, so there was no obligation for the co-arbitrator to disclose it; (ii) the facts presented by Orion did not sufficiently raise justified doubts regarding the co-arbitrator’s impartiality and independence; and (iii) the situation fell under item 4.3.2 of the IBA Guidelines’ Green List, which exempts arbitrators from disclosing when they have previously served with a party's counsel in a different arbitration.

Orion appealed to the Court of Appeals of the State of São Paulo, which reversed the first-instance ruling. The appellate court pointed out inconsistencies in the co-arbitrator’s disclosures. Initially, the co-arbitrator denied any professional relationship with the attorney, but later acknowledged that both the attorney’s and co-arbitrator’s law firms had represented a common client in another arbitration.

The court disagreed with the first-instance judgment on the seriousness of the undisclosed facts. It ruled that the co-arbitrator had a duty to disclose his prior involvement in an arbitration with Engie’s counsel, as this information was pertinent and raised reasonable doubts about his impartiality. The court stressed that the duty to disclose lies with the arbitrators and while the parties have a duty to cooperate, they are not obligated to independently investigate the arbitrators. The court further noted that the arbitrator should have disclosed the facts so the parties could form their own conclusions about potential doubts regarding impartiality.

In addressing the claim that the facts were publicly available, the court clarified that the information was not public by nature and could only be accessed through specific research, such as searching the arbitral institution’s website.

The court concluded that the co-arbitrator’s failure to disclose this information was a breach of good faith and that this breach warranted the annulment of the arbitral award. Following this decision, Engie appealed to the Brazilian Superior Court of Justice (the highest court for non-constitutional matters) and successfully obtained a partial suspension of the annulment's effects. However, as of the publication of this article, the appeal is still pending.

Conclusion

The Orion v Engie decision highlights the importance of arbitrators’ duty of disclosure in Brazil, reaffirming that failure to disclose relevant information, even without actual bias, can lead to the annulment of an arbitral award. The court mentioned that arbitrators must disclose facts that may raise reasonable doubts about their impartiality and independence, allowing the parties to make informed decisions. This ruling strengthens the enforcement of disclosure obligations in Brazilian arbitration, although the matter remains under review by the STJ, which could further shape the country's arbitration framework.

The Permanent Court of Arbitration (“PCA”) has proudly released its 2024 Annual Report, marking a significant milestone as the institution celebrates its 125th anniversary. In this milestone year, the PCA continued to strengthen its global presence in the field of international dispute resolution.

In 2024, the PCA administered a total of 243 cases, including 51 newly initiated proceedings, underscoring its ongoing relevance and adaptability in an ever-evolving legal environment. The Annual Report also highlights the PCA’s 125th Anniversary celebrations, centred around the Third Congress of the Members of the Court, which took place from 12 to 14 June 2024 at the Peace Palace in The Hague. The event brought together 344 participants from 109 countries, further solidifying the PCA's role in the peaceful resolution of global disputes. The program featured side events focused on themes such as gender representation, regional contributions to dispute resolution and the future of global arbitration.

A notable achievement in 2024 was the accession of the Republic of Vanuatu and the Democratic Republic of Timor-Leste as the PCA’s 123rd and 124th Contracting Parties. This expansion reflects the global community’s confidence in the PCA’s services and its commitment to fostering peaceful dispute resolution through arbitration.

Additionally, the Host Country Agreement with the Republic of Paraguay came into effect, expanding the PCA’s capacity to host hearings and meetings globally. This supports the PCA's mission to be accessible “to all” and “at all times”. Throughout 2024, the PCA’s International Bureau provided registry services for 243 cases, 51 of which were initiated during the year. These cases involved parties from over 118 states, with at least one party from each of the United Nations Regional Groups. The PCA also received 51 requests for its appointing authority services.

The Solictors Regulations Authority (“SRA”) has authorised the first law firm, Garfield.Law Ltd, to provide legal services through AI. While many law firms already use AI to support back-office functions and public-facing services, Garfield.Law Ltd, based in Tunbridge Wells, Kent, is the first purely AI-based firm authorised to provide regulated legal services in England and Wales. Garfield.Law offers small and medium-sized businesses and law firms access to an AI-powered litigation assistant. Garfield.Law Ltd specialises in helping businesses recover debts of up to £10,000, with costs starting at £2 for sending a 'polite chaser' letter. The service helps clients recover unpaid debts by guiding them through the small claims court process, all the way to trial.

The SRA is actively encouraging the development of new approaches and models in legal services, recognising the consumer benefits that AI-driven services can bring. AI has the potential to deliver better, quicker and more affordable legal services, addressing access to justice concerns. However, the SRA acknowledges the actual and potential risks to consumers and has ensured that appropriate checks are in place to maintain high levels of consumer protection.

Before granting authorisation to Garfield.Law, the SRA engaged with the firm’s owners to review its processes and ensure that its AI service complies with regulatory standards. This included seeking assurances that Garfield.Law has processes in place to quality-check work, protect client confidentiality and avoid conflicts of interest.

Another key concern addressed by the SRA was the risk of “AI hallucinations” - situations where the AI system fails to propose relevant case law due to limitations in large language model machine learning. The system, however, will only proceed with client approval and there will be ongoing supervision and monitoring processes to ensure the AI operates correctly. In the initial launch phase, greater oversight will be provided to identify potential risks and issues.

Under the SRA's rules, regulated solicitors will still ultimately be responsible for the firm’s legal services and ensuring high professional standards. This means that solicitors will be accountable for the system's outputs and any errors or issues that arise. All regulated law firms, including Garfield.Law, must maintain a minimum level of insurance to protect clients. Garfield.Law is not autonomous and will only take a step where the client approves it.

Paul Philip, SRA Chief Executive, commented:

“The first regulatory approval of an AI-based law firm is a landmark moment for legal services in this country. With so many people and small businesses struggling to access legal services, we cannot afford to pull up the drawbridge on innovations that could have big public benefits. Responsible use of AI by law firms could improve legal services, while making them easier to access and more affordable”.

Philip added,

“Yet trust and confidence in regulated legal services depend on the public knowing that high professional standards are being met. Any new law firm comes with potential risks, but the risks around an AI-driven law firm are novel. So we have worked closely with this firm to make sure it can meet our rules and all the appropriate protections are in place. As this is likely to be the first of many AI-driven law firms, we will be monitoring the progress of this new model closely, so we can both manage the risks and realise the benefits to consumers”.

The SRA also highlighted its dedicated team focused on supporting innovation within the legal sector. This includes working with law firms and technology providers to test new ideas and help develop innovative approaches that could benefit the public.

Companies are encountering an increasing number of complexities when it comes to managing vast data flows and the intricate integration of multiple systems. The evolution of new technologies, especially AI, adds layers of difficulty in ensuring that all systems are interconnected and compliant with growing regulatory demands. Companies are under intense scrutiny, not just to ensure smooth operations but also to navigate an ever-expanding set of regulatory frameworks governing data privacy, cybersecurity and AI use.

Compounding these challenges is the inherent opacity of AI technology itself. AI systems operate in ways that are often difficult for humans to understand fully, making compliance even more difficult. Traditional governance and compliance frameworks, developed for a slower-paced and more transparent digital ecosystem, struggle to address the unique risks posed by AI effectively. With its scale, complexity and ability to evolve quickly, AI demands a more sophisticated, dynamic and transparent approach to governance - one that existing regulatory models may not fully capture.

Increasing Privacy and Cyber Risk Exposure

Privacy litigation now extends beyond traditional breaches, with significant class action settlements, such as those resulting from pixel-tracking, in the US. In the EU, regulators focus on technical violations of GDPR, especially concerning AI implementations and third-party data sharing. Meanwhile, cyber risks are rising, with organisations facing regulatory enforcement from NIS2 in the UK, compromised supply chains and securities litigation linked to undisclosed digital vulnerabilities. New generative AI capabilities, such as model poisoning and prompt injection, add complexity, creating new areas requiring proactive cybersecurity measures.

Who Owns the Data and the Output?

AI challenges traditional IP frameworks, as systems often consume and transform protected content on an unprecedented scale. This raises legal risks for downstream users relying on commercial models trained on contested data. Legal disputes are intensifying as generative models are trained on large amounts of copyrighted content, leading to litigation in various jurisdictions. Visual AI models, in particular, are at the heart of disputes involving traditional publishers, content creators and AI firms.

Trustworthiness of Technology

AI systems can reflect or amplify biases in training data or design, leading to legal exposure under discrimination and human rights laws. This is particularly evident in sectors like employment, finance and law enforcement. The EU AI Act permits monitoring for bias in high-risk AI but requires compliance with GDPR guidelines.

Explainability and Transparency

For industries such as healthcare, lending and admissions, explainability in AI is essential, yet many systems remain “black boxes”.

A Complex and Evolving Regulatory Landscape

AI regulation spans multiple areas: data protection, safety, competition, cybersecurity and sector-specific regimes. The intersection of these regulatory frameworks creates complex, overlapping obligations for AI systems, both in development and deployment.

• Data Protection: GDPR and equivalent global laws govern data use, automated decision-making and profiling.

• AI-Specific: The EU AI Act and the UK’s sector-led approach establish principles-based obligations.

• Online Safety: UK and EU regulations impose duties for transparency and accountability on algorithmic systems.

• Product Liability: EU and UK frameworks cover AI-enabled products and autonomous systems.

• Cybersecurity: NIS2 requires reporting, testing and resilience for AI systems in critical sectors.

• Competition: Digital Markets Act and UK reforms address algorithmic collusion and data access.

As technology evolves faster than laws can keep up, a gap emerges between regulatory intent and enforcement. This disconnect complicates how organisations respond to incidents, requiring experts with hands-on experience in AI evidence handling and knowledge of regulatory changes.

Reputation Risks from AI Litigation

The impact of AI litigation on an organisation’s reputation can be swift and severe, driven by rapid technological change and intense media scrutiny. Managing stakeholder perceptions and understanding the broader societal implications of AI regulation is critical. Changes in regulation can affect investment, innovation and economic stability.

Reputation Risks Breakdown:

• Business-to-Business: IP litigation between rights holders and AI platforms can harm reputations through commercial disputes.

• Business-to-Consumer: Discrimination claims can create "David vs Goliath" battles in the court of public opinion, especially if AI fails to meet user expectations.

• Business-to-Government/Regulator: Breaches of AI-related laws can damage public goodwill and require substantial political capital for reform.

What’s Next?

The intersection of AI regulation with data protection, product liability, competition and cybersecurity laws creates complex obligations for AI systems. While AI’s potential for increased productivity is appealing, organisations must understand their legal, operational and strategic risks of AI in litigation. Firms addressing these risks early will not only build safeguards but will also shape industry standards, enhance resilience and gain a competitive edge.

With the legal sector increasingly embracing AI and technology, solicitors must ensure that these tools are not only effective but also comply with regulatory requirements and professional standards. Below are key compliance tips for solicitors looking to integrate AI and technology into their practices.

Purchasing a Legal AI Product

Before purchasing any new legal AI technology, it is essential to have a clear understanding of what you expect the product to achieve. Review the product specifications carefully to ensure that they meet your needs. Ensure the product is fully demonstrated to verify its functionalities and if possible, speak with someone already using the technology to get a real-world buyer’s perspective. Compatibility with existing systems is another crucial consideration. The last thing you want is to invest in a product that conflicts with your current systems or causes operational disruptions.

Guidelines for Purchasing Lawtech

While there is no specific guideline for purchasing lawtech at present, the UK Government has issued guidance for the adoption of AI in the public sector, setting high ethical standards. This can serve as a useful benchmark for private sector organisations, including law firms. The government’s goal is to ensure the ethical deployment of AI across sectors, promoting transparency, accountability and fairness. Law firms should seek to follow these guidelines when purchasing technology to ensure ethical practices and compliance.

Pinch Points with Standards and Regulations

Law firms are free to use any technology they deem appropriate for their operations, but they must remain compliant with SRA principles and standards. This includes understanding the legal framework for technology, particularly AI. For instance, solicitors should ensure that any AI tools they use are in line with existing regulatory requirements, such as data protection laws and professional conduct rules.

Senior leadership plays a pivotal role in this process. Compliance Officers for Legal Practice (COLPs) should be responsible for ensuring regulatory compliance when new technology is introduced. In addition, board oversight of the purchasing process and ongoing usage is critical for managing the risks associated with technology adoption and failure.

A solid governance framework is vital to ensuring responsible AI adoption. Key components include:

• Appropriate leadership and oversight from senior management

• Undertaking risk and impact assessments prior to adoption

• Developing comprehensive policies and procedures

• Providing ongoing training and awareness for staff

• Monitoring the impact of technology to identify any unintended consequences and mitigate risks

Using Technology to Deliver Services

Technology can help law firms deliver services in innovative ways, such as through platforms where clients are directly connected with solicitors. However, it is critical to ensure these platforms comply with all regulatory obligations. Law firms must undertake due diligence to verify that platforms meet all legal and professional standards.

For instance, law firms cannot accept client referrals from platforms if the platform acquired those clients in ways that violate the SRA’s rules. Specifically, unsolicited client approaches for legal services are prohibited. Also, when it comes to personal injury claims, solicitors should ensure that any payments made for access to platforms do not violate prohibited referral fees under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, particularly Sections 56-60.

Storing Documents in a Virtual Firm

Many law firms are transitioning to cloud-based storage solutions to securely store client information, eliminating the need for paper records. If your firm chooses to store client information digitally, it is essential to ensure that the technology complies with the Code of Conduct for Firms, which requires confidentiality and data security.

Key compliance considerations for storing client information include:

• Ensuring that client affairs are kept confidential, as per Paragraph 6.3 of the SRA Code of Conduct

• Maintaining effective governance structures and systems to meet regulatory and data protection requirements (as outlined in Paragraph 2.1(a))

• Safeguarding client data and adhering to relevant data retention periods specified in data protection laws

Using Electronic ID Verification Processes

Electronic ID verification processes are becoming increasingly common and can help law firms meet their anti-money laundering obligations. These processes can effectively replace traditional methods of verifying client identity, offering a more efficient and accurate solution.

However, it is essential to ensure that these electronic verification tools are compliant with legal and regulatory obligations, including data protection and money laundering regulations. Firms should also be transparent with clients about the verification process, ensuring clients understand how their personal data will be processed.

Data Privacy Considerations

In an increasingly digital world, data privacy has become a significant concern for consumers. Clients are more aware than ever of their privacy rights and firms must be mindful of this when using AI and other technology to handle client data. Failure to comply with data protection laws can lead to reputational and financial damage.

Beyond basic compliance with data protection laws, firms should think critically about how they handle and use client data. Consumer trust can be easily eroded if clients feel their data is being used in ways they didn’t expect or consent to. Solicitors should ensure that clients are informed about how their data will be used, especially when automated decision-making or profiling is involved. The Information Commissioner’s Office (ICO) provides excellent guidance on data protection, including the requirements for AI-based products.

Providing Alternatives for Non-Tech-Savvy Clients

While lawtech offers efficiency and innovation, not all clients will be comfortable with or able to use these technologies. Solicitors must ensure that clients are not excluded from accessing legal services simply because they are unfamiliar with or unwilling to use digital tools.

It is essential that clients understand their options, have the ability to make informed decisions about their legal matters and are given alternative ways to interact with the firm when necessary. For vulnerable consumers, special care should be taken to ensure that risks associated with exploiting their vulnerability are identified and mitigated.

What Happens When Technology Fails?

Although legal technology can enhance services, it may malfunction or fail to perform as expected, leading to operational, financial and reputational consequences for the firm and its clients. Firms must be clear on their responsibilities in the event of technology failure, including who clients should turn to for recourse.

Contracts with technology suppliers should clearly define liability and ensure that clients are aware of the firm’s responsibilities when using AI or other technologies. It is important to set expectations upfront with clients regarding the use of technology and the potential risks involved.

Do not Forget the Essentials: Cybersecurity

Finally, cybersecurity remains an essential consideration when adopting any new technology. The National Cyber Security Centre (NCSC) offers valuable resources for law firms, especially small businesses, on protecting digital systems from cyber threats. Firms should stay up-to-date with the latest cybersecurity best practices to ensure that they are effectively managing and protecting client data.

By following these compliance tips, it would be possible to responsibly integrate AI and other technology into their legal practices, ensuring that they stay compliant with regulations and continue to serve their clients’ best interests.