In the recent case before the English Commercial Court of Energyen Corp v HD Hyundai Heavy Industries Co Ltd [2025] EWHC 1586 (Comm), Justice David Foxton rejected a challenge to an ICC arbitration award under Section 67 of the Arbitration Act and confirmed that the law of domicile of a foreign company determines whether contracts—including arbitration agreements—transfer to a third party following the partial “spin-off” of a company.
The court also confirmed that failure to include certain specified details in the Request for Arbitration (RFA) as required by Article 4(3) of the ICC Rules would not normally be sufficient for a challenge under Section 67 of the Arbitration Act.
THE KEY FACTS
Energyen Corp is a Korean company whose core business is the production of power generating equipment. Energyen entered into a Supply Contract to service a thermal power plant in Saudi Arabia with another Korean company called Hyundai Heavy Industries Co Ltd (the Original HHI). The Supply Contract was governed by English law and provided for ICC arbitration in London.
In 2019, as part of a corporate restructuring, the Original HHI notified Energyen of the partial transfer of its business to a new entity (HHI 2019) by way of a “spin-off.” HHI 2019 would engage in the same line of business with the same employees, know-how, technique and facilities, and a notice sent to Energyen stated that “all of our [i.e., the Original HHI’s] existing rights and obligations under all of your contract(s) […] with us, will, as of the Effective Date, be comprehensively transferred to and assumed by [HHI 2019] by operation of Korean law.”
Disputes arose under the Supply Contract and were referred to an ICC arbitration tribunal. The tribunal issued an award of damages in favour of HHI 2019. The transfer of the rights and obligations from the Original HHI to HHI 2019 appears to have passed unmentioned during the course of the arbitration.
However, Energyen subsequently challenged the adverse arbitration award on the basis that the tribunal had lacked the jurisdiction to make an arbitration award in favour of HHI 2019 because of the following reasons:
- The Original HHI was and remained the party to the Supply Contract and the arbitration agreement.
- The Original HHI commenced the arbitral reference.
- The necessary steps under English law for the transfer of an arbitration agreement were not taken.
Under English conflict of laws rules, the effect of a corporate succession of a foreign company on an English law contract is determined by the law of the company’s domicile. While case law was only identified in which the rule had been applied in cases of universal succession, Justice Foxton saw “no reason in principle” why the same approach should not apply to a partial succession. In this instance, he considered that the partial succession had much more in common with a universal succession than with a case where specific rights or liabilities are transferred from one existing entity to another.
Accordingly, the law of HHI’s domicile (Korean law) applied.
Under Korean law, the corporate restructuring was nonconsensual in nature and, therefore, did not require notice to or consent from third parties. It also took effect by operation of law from its adoption. Accordingly, Justice Foxton concluded that HHI 2019 had succeeded the Original HHI, including in respect of the Supply Agreement and the arbitration agreement. Therefore, HHI 2019 could enforce the Supply Agreement against Energyen by way of arbitration.
ARTICLE 4(3), ICC RULES
Energyen also argued that the arbitration was not properly commenced because the RFA (i.e., the document which commences an ICC arbitration) was not compliant with the requirements under Article 4(3) of the ICC Rules that it should contain certain information, including the basis upon which the claim is made and any relevant agreements.
Following a review of the applicable rules and relevant commentary, Justice Foxton concluded that noncompliance with Article 4(3) of the ICC Rules would not normally be sufficient grounds for a challenge under Section 67 of the Arbitration Act, particularly where the unsuccessful party first seeks to raise this as a de novo argument after participating in the arbitration. While it was not necessary for Justice Foxton to rely upon it in this instance, this accords with Section 73(1) of the Arbitration Act, which provides that a party who takes part in arbitration proceedings and fails to raise certain challenges promptly or within a specified time limit may lose the right to object.
Best practice should always be to ensure that an RFA complies with any applicable rules and contains all relevant details. However, this decision should reassure claimants that where they are unable or unwilling or simply forget to include certain details in a RFA when initiating arbitration proceedings, this should normally be insufficient to support a subsequent Section 67 challenge.
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