In Tecnicas Reunidas Saudia for Services & Contracting Co Ltd v Petroleum Chemicals and Mining Company Limited [2025] EWHC 1785 (Comm), the High Court set aside an ICC Tribunal’s (“Tribunal”) partial award in which it found that it had jurisdiction in a situation where the parties’ contractual documentation contained potentially inconsistent arbitration agreements. In particular it found that the Tribunal had erroneously adopted a “pick and mix” approach to assessing the parties’ agreement, ignoring provisions on an order of precedence.

Background

Tecnicas entered into a subcontract with PCMC, concerning electrochemical elements to works on a gas programme in Saudi Arabia. The subcontract comprised a series of agreements, namely:

1. a Purchase Order (“PO”), setting out agreed contractual terms;
2. a Deviation List, memorialising the parties' negotiations (however, both parties accepted this was not a contractual document);
3. Purchase Order Technical Requisitions; and
4. General T&Cs for Construction Subcontracts (“GTCCS").

Importantly, in the PO, the order of these documents set out above was expressly agreed upon as an order of precedence as between them. 

These documents contained differently expressed arbitration agreements:

• Clause 11.1 of the PO provided for the subcontract to be governed by the laws of England and Wales, with disputes to be settled by ad hoc arbitration with three arbitrators, seated in London.
• Clause 32 of the GTCCS provided for the subcontract to be governed by the laws of Saudi Arabia, with disputes to be settled by ICC arbitration with three arbitrators, seated in Riyadh.
• The Deviation List also recorded the parties’ negotiations of the draft PO, recording that PCMC “accepts clause 11.1 and 2: England and Wales law and Arbitration under ICC Laws in London and held in English", with the item being described as “closed".

Against that background, PCMC filed a Request for Arbitration (“RFA”) before the ICC.

Tecnicas objected but, in a Partial Award, the Tribunal found it did have jurisdiction.

The jurisdictional issue before the High Court

Tecnicas challenged the Partial Award under section 67 of the AA 1996 (the “s.67 Application”). It did so on the ground that the Tribunal had no jurisdiction to hear the claim, because the parties never agreed to ICC arbitration, but only to an ad hoc arbitration in London by three arbitrators as set out in the PO.

Having dismissed objections that Tecnicas had failed to challenge the Tribunal’s jurisdiction in a timely manner, the judge turned to its fundamental objection, which was that the PO, as executed, contained the arbitration agreement between the parties, and was itself at the top of the order of precedence. As such, the PO took precedence over the other contractual documentation.

PCMC accepted that the PO was at the top of the hierarchy. However, it argued that all documents forming the subcontract should nonetheless be read together, and that when clause 11.1 of the PO was read with clause 32 of the GTCCS, the parties had agreed for arbitration in London, under ICC Rules, governed by English law (a position accepted by the Tribunal).  

Bryan J agreed with Tecnicas:

• Due to the order of precedence set out in the PO, if there was any inconsistency between the terms set out in the PO and the terms set out in any other document, then the terms of the PO prevailed.
• Clauses 32 of the GTCCS and 11.1 of the PO were clearly inconsistent in their terms: they provided for a different governing law, seat of arbitration and form of arbitration (institutional or ad hoc). The Tribunal and PCMC’s “pick and mix” approach was inappropriate: each clause was an arbitration agreement, containing a package of terms fundamental to that agreement. The form of arbitration “could not be divorced” from the associated governing law and seat provisions so as to enable the construction of some form of hybrid agreement. As part of this conclusion the judge rejected PCMC’s suggestion that the difference between an ad hoc and institutional (ICC) agreement could be dismissed as mere procedure – there was a real substantive difference in consequences; for example the ICC Rules contained a waiver of recourse which would operate to exclude any appeal on a point of (English) law under s.69 AA, and there are differences between the ICC Rules and ad hoc arbitration under the AA as to the appointment and replacement of arbitrators, the degree of party autonomy in deciding the architecture of the arbitration, the costs involved and the autonomy of arbitrators.

Ultimately, therefore, Bryan J held that the Tribunal did not have jurisdiction and set aside the Partial Award.

Comment

In some contexts, for example construction contracts, it may be common for parties to conclude a number of contractual documents which potentially overlap. This decision reinforces that, in such situations, it will help to give careful consideration to the potential presence of multiple and differing arbitration agreements. In such situations, ideally, consistent arbitration provisions might be concluded to promote consistency. But, if not, and the parties have sought to resolve any inconsistency through an order of precedence than, as a matter of English law, that arrangement will be respected and it will be inappropriate to “pick and mix” from conflicting arbitration agreements to try and construct an agreement.

The case is also a helpful reminder that when it comes to challenging an arbitral tribunal’s jurisdiction, the AA imposes restrictions on the timing for doing so and parties should make sure they do so promptly and within those limits.