Petroleum Exploration (PVT) Limited v Frontier Holdings Ltd & Anor

HH Judge Pelling KC: Introduction

1. This is the hearing of two arbitration claims, being: i) The 13 Claim issued on 8 January 2025 by Petroleum Exploration (PVT) Limited (“PEL”) against Frontier Holdings Limited (“FHL”) and Spud Energy Pty Limited (“Spud”) under ss.67 and 68 of the Arbitration Act 1996 (“AA96”) in respect of a Partial Final Award dated 12 December 2024 (“Award”) and a Final Award on Costs dated 31 March 2025 (“Costs Award”) issued by Mr Michael M. Collins SC (“Arbitrator”) in an ICC arbitration seated in England and Wales brought by FHL and Spud against PEL in 2022 (“London Arbitration”), under an arbitration agreement contained in a Settlement Agreement dated 12 August 2016 between PEL, FHL and Spud (“Settlement Agreement”); and ii) The 307 Claim issued on 3 July 2025 by FHL and Spud against PEL for damages and a final anti-suit injunction under s.37 of the Senior Courts Act 1981 (“SCA”) to restrain PEL from pursuing proceedings in the Pakistan courts (“Pakistani Proceedings”) in breach of the arbitration agreement contained in the Settlement Agreement. The principal focus of attention at the hearing was on the AA96, s.67 challenge in the 13 Claim because (i) the claim under AA96, s.68 that was included in the 13 Claim had been abandoned prior to the start of the hearing; and (ii) as Lord Goldsmith KC accepted in paragraph 8 of his written opening submissions, the only live issue that remained in the 307 Claim was parasitic on the outcome of the jurisdiction challenge in the 13 Claim. The Dispute in Summary

2. The dispute concerns some but not all the remedies that the Arbitrator granted to FHL and Spud in the London Arbitration.

3. FHL and Spud commenced the London Arbitration against PEL on 10 December 2022, in which they sought declarations that contrary to what was alleged by PEL, they had not breached the Settlement Agreement by failing to transfer some oil and gas rights as mandated by that agreement, and alleged that PEL was the party responsible for the failure and so was itself in breach.

4. On 7 February 2023 FHL commenced separate ICC proceedings against PEL in Singapore (“Singapore Arbitration”), pursuant to the arbitration agreements contained in the parties’ Joint Operating Agreements (“JOAs”) relating to the Badin IV oil and gas blocks. In these ICC proceedings, FHL alleged that PEL breached the terms of the JOAs by (i) demanding payment by FHL and Spud of certain operating costs; (ii) seeking to forfeit FHL’s Working Interest in the Badin IV blocks under the JOAs’ contractual forfeiture regimes. FHL claimed damages in respect of revenues from sales of gas produced from the Badin IV South block which it was alleged had been withheld in reliance on PEL’s forfeiture. PEL successfully challenged jurisdiction in the Singapore Arbitration on the basis that the disputes should have been referred to domestic arbitration in Pakistan. The decision of the tribunal in the Singapore Arbitration that it did not have jurisdiction was subsequently overturned by the Singapore International Commercial Court.

5. By the Award, the Arbitrator found that PEL had breached the Settlement Agreement so that it was not entitled to forfeit FHL’s Working Interest in the Badin IV blocks and dismissed PEL’s counterclaim. In consequence, the Arbitrator concluded in his Dispositif: “1. The Arbitral Tribunal makes the following declarations: (a) A declaration that the Arbitral Tribunal has jurisdiction to deal with the claims and counterclaims pleaded in this arbitration; (b) A declaration that FHL is not in breach of any of the terms of the Settlement Agreement in the manner alleged by PEL; (c) A declaration that Spud is not in breach of any of the terms of the Settlement Agreement in the manner alleged by PEL; (d) A declaration that PEL is in breach of the terms of the Settlement Agreement by failing to discharge its obligations to the [Director General of Petroleum Concessions of the Government of Pakistan (“DGPC”)] thereby causing the DGPC to withhold its consent to the transfers of the Kandra Discovery Area and Badar Working Interests; (e) A declaration that the Settlement Agreement is extant and continues to apply to the parties to this arbitration; (f) A declaration that FHL continues to be a 27.5% Working Interest Owner of Badin IV North under Section 2.7(f) of the Settlement Agreement; (g) A declaration that FHL continues to be a 27.5% Working Interest Owner of Badin IV South under Section 2.7(f) of the Settlement Agreement; (h) A declaration that PEL was not and is not entitled to reverse or set aside the costs adjustments made in the Settlement Agreement in respect of Badin IV South and/or Badin IV North; (i) A declaration that PEL was not and is not entitled to seek forfeiture of FHL’s Working Interests in Badin IV South and/or Badin IV North; (j) A declaration that PEL is in breach of the relevant provisions of the Settlement Agreement by reason of PEL having procured the withholding of the payments due to FHL on foot of gas sale invoices in respect of the sale of gas from Badin IV South. “2. The Arbitral Tribunal awards FHL damages against PEL in the sum of US$2,482,616 being the sums which should have been but were not paid to FHL on foot of the gas sale invoices in respect of Badin IV South for the period from November 2022 until July 2023.” … 4 The Arbitral Tribunal makes a declaration that FHL is entitled to be paid any sums due to it pursuant to any gas sale invoices in relation to Badin IV South from August 2023 to the date of this award and awards FHL damages in the amount of such unpaid invoices with interest thereon in like manner as aforesaid.

5. The Arbitral Tribunal dismisses all other claims and counterclaims save that the Arbitral Tribunal reserves jurisdiction to decide the question of the costs of these arbitral proceedings pending further submissions from the Parties on such issue.” Of these, PEL disputes that the Arbitrator had jurisdiction to grant any of the relief referred to at 1(a), (f), (g), (h), (i) and (j) or award damages as set out in Paragraph 2 or the declaration set out at Paragraph 4. PEL also disputes the jurisdiction of the Arbitrator to award interest but that is parasitic on the jurisdictional challenge in respect of Paragraph 2 of the Dispositif so I need say no more about that. PEL accepts that the Arbitrator had jurisdiction to grant the declarations at Paragraph 1(b)-(e).

6. PEL challenges the jurisdiction of the Arbitrator in the London Arbitration to grant the challenged declarations and award damages on the basis that only an arbitral tribunal appointed under the arbitration agreements contained in the JOAs would have jurisdiction to make such orders. As things stand currently, this would appear to be the arbitral tribunal in the Singapore Arbitration. FHL and Spud maintain that this submission should be rejected and the 13 Claim dismissed because the disputed declarations and monetary awards were not causes of action or claims under the JOAs but were remedies sought by FHL and Spud in the London Arbitration for breach of the Settlement Agreement, and follow from the Arbitrator’s conclusion that PEL had breached the Settlement Agreement so that it was not entitled to forfeit FHL’s interests. Factual Background

7. PEL is incorporated in Pakistan and is the holder of various petroleum exploration licences and production leases granted by the President of Pakistan relating (amongst others) to the Badin IV North and South oil and gas blocks. FHL is incorporated in Bermuda and Spud in Australia.

8. In April 2006, PEL entered into what was in effect a quasi-joint venture arrangement with FHL in relation to the Badin-IV North and South gas blocks

9. . This relationship was governed by a number of interlocking agreements. It would needlessly lengthen this judgment if I referred to them all. In essence however, following the execution of various farm-in agreements, the end result was that PEL held a 47.5% Working Interest in the Badin IV North and South oil and gas blocks and FHL obtained a Working Interest in each block of 27.5%. There were other interests as well but they are not material for present purposes. The JOAs referred to earlier govern all operational and financial aspects of exploration and production at the Badin IV North and South Blocks. FHL became a party to the JOAs following execution of deeds of assignment on 2 June 2006 under which it acquired its Working Interest in each of the blocks.

10. The JOAs follow a broadly familiar pattern. The Operator proposes a budget, which following approval by the holders of the Working Interests enables the Operator (PEL in this case) to make cash calls. The ultimate penalty if such a cash call is not met is to entitle the non-defaulting holders of the Working Interests to forfeit the interest of the defaulter subject to approval by the DGPC on behalf of the Government of Pakistan. The JOAs each contained an arbitration agreement.

11. In 2015 a series of disputes arose between the parties, the detail of which does not matter for present purposes. Two arbitrations were commenced: one arbitration was commenced by PEL against FHL and another arbitration was commenced by FHL against PEL. These disputes were settled by the Settlement Agreement. As might be expected the Settlement Agreement is lengthy, complex and plainly drafted by skilled and experienced professionals acting for each of the parties.

12. The parties to the Settlement Agreement were each of PEL, FHL and Spud. At Recital E it was recorded that “The Parties agreed to the terms for the settlement of the disputes between them and the terms for the full and final settlement of the JOA Arbitration and the AMI Arbitration on the principles set out in the Memorandum of Agreement dated 24 July 2016 (the "MOA'') between PEL and FHL, which provides for, among other things, the withdrawal of the AMI Arbitration and the JOA Arbitration; the withdrawal of the Default Notice, Forfeiture Notice and DGPC Application; and the transfer of certain assets among the Parties. The Parties now wish to record those terms of settlement, on a binding basis, in this Agreement.”

13. At Recital G it was recorded that “… FHL, Spud and PEL wish to enter into definitive documentation contemplated by the MOA, including this Agreement …”. In the lengthy definitions section of the agreement (Article 1) there was included a comprehensive definition of the phrase “ JOA Disputes” as meaning “… any and all Claims between any of the FHL Parties and any of the PEL Parties connected with or arising out of PEL's or FHL's rights and obligations under the Badin IV North Concession Documents, the Badin IV South Concession Documents and/or any other agreement relating to Badin IV North and Badin IV South and/or otherwise relating to Badin IV North and Badin IV South up to the date hereof …”. It is made explicitly clear that: “For the avoidance of doubt, the JOA Disputes shall not include any Claims for or in relation to breaches of any legal or equitable obligations arising out of the Parties' future conduct under or in connection with the Badin IV North Concession Documents, the Badin IV South Concession Documents and/or otherwise relating to Badin IV North and Badin IV South.”

14. This is significant only because Lord Goldsmith KC expressed grave concerns on the part of PEL that the, or at least some of the, declarations granted by the Arbitrator appeared on a literal analysis to apply to future disputes. Mr Landau KC made clear on behalf of FHL and Spud that they did not suggest that was the effect of the declarations sought and granted and was happy for there to be inserted into any order dismissing the claim a recital recording that such was the case. That this was the, or at least a, major concern of PEL’s became apparent only on the second day of this hearing. I am bound to say that I had understood Mr Landau’s submissions during the first day of the hearing as having made that clear but he was happy to put the point beyond doubt by an express confirmation I sought from him on day 2 in light of Lord Goldsmith’s concerns.

15. The English courts have consistently held that Awards by Commercial Arbitrators are to be read in a reasonable and commercial way, not applying “… a meticulous legal eye endeavouring to pick holes, inconsistencies and faults… ” – see by way of example Obrascon Huarte Lain SA (t/a OHL International) v Qatar Foundation for Education, Science and Community Development [2019] EWHC 2539; [2019] 2 Lloyd’s Rep. 559 (a case concerning a s.68 challenge). Applying that approach, I do not accept that construing the declarations made by the Arbitrator as extending to future disputes is a fair assessment of what he decided or intended to decide or even a fair literalist reading of the Award, particularly when the Award is read (as it must be) in the context established by the terms of the Settlement Agreement read as a whole and taking account of the detailed and careful Award when read as a whole. In any event, however, I accept Mr Landau’s assurances in that regard and that the point can be put beyond realistic dispute by including in the order that will follow from this judgment a recital confirming the assurances that Mr Landau gave in the course of the hearing.

16. Returning to the Settlement Agreement, it was concerned as I have said with two disputes – that concerning the Kandra block with which FHL was concerned and that concerning the Badin IV North and the Badin IV South blocks, with which FHL was also concerned. In addition, Spud had an interest in another concession known as the Badar Concession.

17. The substance of the Settlement Agreement is contained in Article 2, entitled “ The Settlement Transaction” . The Article is broken down into a number of sub, sub–sub and sub–sub-sub articles. It is not necessary that I set them all out in detail. In substance: i) Subject to the approval of the DGPC, FHL and Spud were to use reasonable commercial efforts to assign and transfer their working interests in the Kandra block and Badar Concession to PEL with FHL and Spud holding their respective interests on trust for PEL pending receipt of DGPC approval; ii) FHL and Spud were relieved of various past expenditure claims in respect of the Kandra block and the Badar Concession and FHL’s accounts in respect of the Kandra and Badin IV blocks were reset to zero; iii) Save to the extent summarised above, FHL continued to hold its other Working Interests in those assets where PEL was also interested including the Badin IV North and the Badin IV South blocks and would continue to be obliged to pay its Working Interest share of all approved costs and expenses in accordance with the Badin IV Concession Documents, being principally the Badin IV JOAs.

18. As part of the settlement structure within the Settlement Agreement, PEL withdrew the default and forfeiture notices that gave rise to the disputes being resolved by the Settlement Agreement, the parties agreed various releases and the arbitrations that had been commenced following the development of the disputes were discontinued. As Lord Goldsmith submitted, the “… Settlement Agreement and the Settlement Transaction thus settled the parties’ disputes in the 2015/2016 arbitrations. However, the parties did not change the overall terms of their relationship in respect of the Badin IV blocks, which would otherwise continue to be governed by the JOAs …” I agree and, as I have said, Mr Landau does not suggest otherwise.

19. The Settlement Agreement was subject to an entire agreement clause in conventional terms (Article 5.3), was agreed to be governed by English law (Article 5.7(a)) and was subject to an arbitration agreement in the following terms (Article 5.7(b)): “If a dispute arises between the Parties with respect to any matter arising under this Agreement and/or the Settlement Transaction, the Parties shall attempt to resolve all of the items in dispute as may be set out in any objection notice delivered by the disputing party within 30 days of receipt of the objection notice by the non-disputing party. Any items in dispute not resolved within such 30 day period shall be settled by arbitration in London, England, conducted under the Rules of Arbitration of the ICC by a single arbitrator, having the necessary qualifications and expertise to address the matter, mutually agreed to by the Parties, and failing such agreement, appointed in accordance with the ICC Rules. The language of arbitration proceedings shall be English and any award rendered in such proceedings shall be final and binding upon the Parties. Any such award may be filed in any court of competent jurisdiction and may be enforced by a Party as a final judgment in such court.”

20. Notwithstanding the terms of the Settlement Agreement, the settlement could not be carried into effect essentially because the DGPC declined to provide its consent to the various transfers of Working Interests as provided for by the Settlement Agreement unless various payments claimed by it were met. PEL on the one hand and FHL and Spud on the other denied liability to make the payments claimed by the DGPC. Notwithstanding the absence of DGPC consent, PEL contended that FHL and Spud were in breach of the Settlement Agreement by failing to transfer the interests they had agreed to transfer to PEL, and sought to reverse the financial settlement contained in the Settlement Agreement and to apply a late payment surcharge which together was alleged as at 19 January 2022 to amount to US$10,356,826. PEL threatened to serve Forfeiture Notices in relation to FHL’s Working Interests in the Badin IV North and the Badin IV South blocks in the event of non-payment. FHL and Spud maintained that this was all misconceived because the obligation to transfer could only take effect with DGPC consent and that had been withheld because PEL had failed to pay the sums claimed by the DGPC or such part of them as were due. FHL accepts that some of the sum said by PEL to be due related to sums falling due in respect of post Settlement Agreement liabilities. FHL maintains that all of the post Settlement Agreement sums have been paid but PEL disputes that is so. That dispute is not material for present purposes since it relates to post Settlement Agreement liabilities.

21. PEL’s attempt to reverse the effect of the Settlement Agreement led to the commencement by FHL and Spud of the London Arbitration on 10 December 2022, pursuant to the arbitration agreement contained in the Settlement Agreement. On 11 January 2023, PEL carried out its threat to issue Notices purporting to forfeit FHL’s interests in Badin IV North and Badin IV South blocks and to withhold FHL’s 27.5% share of the gas produced from the Badin IV South concession on the basis that its interest had been forfeited. On 7 February 2023, FHL commenced the Singapore Arbitration pursuant to the arbitration agreement contained in the JOAs.

22. Since PEL places reliance on the disputed declarations and damages claim being the subject of the Singapore Arbitration and not the London Arbitration, it is important to note the terms of the Request for Arbitration by which the London Arbitration was commenced. Having set out the background in some detail, at paragraph 28, under the subheading “ EVENTS GIVING RISE TO THE CURRENT DISPUTE” , it was stated: “The following description serves as a high-level overview of the nature and circumstances of the dispute giving rise to the FHL’s and Spud’s claims and the basis upon which the claims are made. FHL and Spud reserve the right to make, further detailed submissions of fact and law in support of its claims, and to amend, supplement, or modify the claims stated in this Request during the arbitration. ”

23. This section of the Request for Arbitration then goes on to set out their case that they had fulfilled their obligations under the Settlement Agreement, and the steps taken by PEL on the basis that it alleged that FHL and Spud were in breach of the Settlement Agreement. It then stated at Paragraph 35: “By September 2022, PEL started to adopt an increasingly aggressive tone in its communications and meetings with the Claimants. PEL also expanded its allegations to the point of asserting that due to the failure to effect the transfers and non-payment of carried costs adjustments related to Badin IV, it considered FHL as having forfeited its Working Interest. This last assertion is particularly serious as PEL has threatened initiating forfeiture proceedings against FHL in respect of the Badin IV Assets – which could (wrongly) result in the GOP (or relevant government regulator) taking drastic action against FHL.”

24. Thus whilst at the date of the Request for Arbitration that led to the London Arbitration, notice of forfeiture had not been served, the Request had been formulated in contemplation of that step being taken, a point that is also made explicitly clear by the terms of Paragraph 53 referred to below.

25. At Section VI of the Request, FHL and Spud set out a summary of their claims. The cause of action was set out in summary at Paragraph 38 as being that “… the Respondent has breached the express and implied terms of the Settlement Agreement above. By failing to discharge its financial obligations with the GOP, PEL has obstructed the relevant approvals required to effect the relevant assignments contemplated in the Settlement Agreement. This constitutes a breach of the express and implied terms of the Settlement Agreement .” It was submitted by Mr Landau that the Request was written in contemplation of the service of a formal detailed Statement of Case following finalisation of the ICC Terms of Reference. I accept that submission. It reflects conventional ICC arbitration practice and is consistent with Paragraph 48 of the request, by which FHL and Spud reserved “… the right to amend, modify, and/or supplement this Request for Arbitration, and to also request other relief, including declarations and damages, as they may consider necessary or appropriate to enforce or defend their rights .”

26. PEL maintains that initially FHL and Spud proceeded on the basis that only limited declaratory relief could be obtained in the London Arbitration. In support of that proposition, PEL places some reliance on the fact that at Paragraph 50, FHL and Spud had indicated that they would seek declarations that PEL was in breach of the Settlement Agreement. Whilst that is what is set out in those paragraphs, I do not accept that in any sense bound FHL and Spud to seek only that relief. That much is apparent from the reservation of rights in Paragraph 48 but also from Paragraph 52, which contemplates that a monetary remedy would be sought and from Paragraph 53 by which FHL and Spud had reserved “… their right to seek further or alternative relief, including interim relief. This is particularly in view of the continued threats by PEL in respect of forfeiture .”

27. There was significant difficulty largely caused by PEL in the initial stages of the arbitration but by 29 May 2023, the Arbitrator had established a procedural timetable, FHL and Spud (who by now had commenced the Singapore Arbitration) delivered their Statement of Claim on 31 May 2023 and PEL delivered its Defence and Counterclaim on 5 July 2023.

28. By their Statement of Claim, FHL and Spud set out their factual case on breach in extensive detail and in Section VI set out the remedies it was seeking. At Paragraph 92 it stated that because of PEL’s breaches, FHL’s Working Interests in the Badin Assets were in jeopardy and in consequence: “… the appropriate relief would be declarations that would prevent PEL from unilateral reversal of the Carried Cost it agreed to pay under the Settlement Agreement and that FHL cannot be ejected from the Badin Assets.

93. For these reasons, the Claimants submit that the appropriate relief for the harm suffered are the following declarations: (a) FHL is not in breach of the express and implied terms of the Settlement Agreement; (b) Spud is not in breach of the express and implied terms of the Settlement Agreement; (c) PEL is in breach of the express and/or implied terms of the Settlement Agreement by failing to discharge its GoP obligations and thus precluding the transfers of Kandra Discovery Area and Badar; (d) The Settlement Agreement is extant and continues to apply the PEL, FHL, and Spud; (e) FHL continues to be 27.5% Working Interest Owner of Badin IV North; (f) FHL continues to be 27.5% Working Interest Owner of Badin IV South; (g) PEL is not entitled to reverse Carried Cost, in respect of Badin IV South and/or North; (h) PEL is not entitled to seek forfeiture of FHL’s Working Interests in the Badin Assets; (i) PEL is in breach of the relevant provisions of the Settlement Agreement by withholding FHL’s sale invoices in Badin IV South; and (j) PEL has not suffered any economic loss due to delay in the Transfer of Assets. In addition, FHL sought damages “… currently quantified at USD 2.5 million, plus additional damages for the economic loss suffered by FHL from 1 November 2022 (date of PEL’s respective breach) through the date of the Final Award... ” together with interest and costs.

29. PEL pleaded its jurisdictional objections at Paragraph 83 of its Defence and Counterclaim on the basis that the declarations sought in Paragraph 93 of the Statement of Claim, other than those sought in sub-paragraphs (a) – (d), were “ … extraneous to this arbitration hence not in the jurisdiction of the Sole Arbitrator…” . This was expanded upon in its written submissions by asserting that: “As to the scope of this arbitration reference, the Respondent has repeatedly stated that any matter(s) which is a subject of Petroleum Concession Agreement(s) (“PCAs”) and/or Joint Operating Agreement(s) (“JOAs”) pertaining to the concessions being referred in this arbitration are excluded from this arbitration in view of the fact that completely different law, arbitration agreement and arbitral forums are applicable thereto. Therefore, this Tribunal is requested to refrain from opining on or considering any and all the subjects arising out of or in connection (directly or indirectly) with the PCAs and of the JOAs of Kandra, Badar, Badin IV North and Badin IV South concessions as the learned Sole Arbitrator does not have the jurisdiction to deal with such matter(s). ”

30. Meanwhile, in the Singapore Arbitration, PEL challenged the jurisdiction of the tribunal to determine the claims made in those proceedings by its Answer filed on 3 March 2023. On 21 March 2024, the Singapore Arbitration tribunal issued its jurisdiction award in which it decided that it lacked jurisdiction. Thereafter there was an appeal to the Singapore International Commercial Court, which on 30 September 2024, reversed that conclusion – see Frontier Holdings Ltd v. Petroleum Exploration (Pvt) Ltd [2024] SGHC(I) 34.

31. In summary therefore, the order of procedural events was that (i) on 10 December 2022, FHL and Spud commenced the London Arbitration expressly in contemplation of PEL serving a Notice of Forfeiture, (ii) on 11 January 2023, PEL purported to issue its Notice of Forfeiture, (iii) on 7 February 2023, FHL and Spud commenced the Singapore Arbitration, (iv) on 3 March 2023 PEL challenged the jurisdiction of the Singapore Arbitration tribunal and (v) on 31 May 2023 FHL and Spud delivered their Statement of Claim in the London Arbitration in which they set out their claim to the remedies in respect of which PEL challenges jurisdiction on the basis that if they are claimed at all they must be claimed in the Singapore Arbitration. It was only on 7 July 2023, that the Singapore Arbitration tribunal directed a trial of the jurisdiction issue as a preliminary issue. Whilst I accept that FHL and Spud advanced claims in the Singapore Arbitration that concern the same subject matter as the disputed declarations and damages claim in the London Arbitration, I do not consider it appropriate to characterise that as FHL and Spud removing “… their claims for breach of the JOA … from the Singapore Arbitration and plac[ing] them in the London Arbitration instead …” What they did was seek by way of remedies for what they alleged was PEL’s breach of the Settlement Agreement, remedies that might also be available for breach of the JOAs the subject of the Singapore Arbitration. There is nothing wrong in principle in seeking the same or similar remedies by alternative routes. It is not suggested that FHL and Spud were precluded as a matter of law from seeking the remedies sought in the London Arbitration other than by jurisdictional challenge. That depends exclusively on the true meaning and effect of the arbitration agreement in the Settlement Agreement. That being so, I consider the Singapore Arbitration to be essentially immaterial to the issues that I have to decide.

32. Finally, before turning to the issues that arise, I should say something about the award under challenge. It is important to note at the outset that a challenge to jurisdiction requires a court to undertake “ a full judicial determination on evidence… ” – see Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of the Government of Pakistan [2010] UKSC 46 ; [2011] 1 AC 763 at [26] approving the conclusion of Rix J (as he then was) on that point in Azov Shipping Co v Baltic Shipping Co [1999] 1All ER 476. Thus where there is a challenge to jurisdiction, there is usually no, or at best only limited, benefit to be had in referring to the award under challenge. However in a case such as this where there is only a partial challenge, it is appropriate to refer to the Award to the extent that the elements of the Award not under challenge are relevant to the issue of disputed jurisdiction, particularly since it is FHL’s case that the challenged declarations and other remedies awarded were what the Arbitrator had concluded was necessary in order to place FHL and Spud in the position they would have been in but for PEL’s breach of the Settlement Agreement.

33. It is important to note therefore the following findings by the Arbitrator: i) The reason why the DGPC withheld consent to the Working Interest transfers to PEL was because of a failure by PEL to discharge the outstanding payment obligations to the Government of Pakistan in breach of the Settlement Agreement – see Award, [436] and [476]; ii) Neither of the Claimants were in breach of the Settlement Agreement as alleged by the Respondent, nor was PEL induced to enter the Settlement Agreement by any misrepresentation by either FHL or Spud – see Award, [537] iii) In relation to PEL’s response to its claimed breach by FHL and Spud of the Settlement Agreement: “538. Having regard to what PEL considered to be the Claimants' failure to fulfil their obligations to transfer their Working Interests in Badar and the Kandra Discovery Area to PEL, PEL informed FHL in an email of 5 January 2022 that the cost adjustments made in relation to Badin North and Badin South under the Settlement Agreement (i.e. the Carried Costs) "stood reversed" with effect as of the date of the Settlement Agreement. In other words, PEL maintained that the Claimants were now liable for these costs and since they had not been paid, were liable for late payment surcharges. PEL set out more financial details of this claim in its letter of 19 January 2022. The payment allegedly due by FHL amounted to US$10,356,826 with the late payment surcharge continuing.

539. It will be apparent from the findings that I have already made, and in particular the finding that neither of the Claimants were in breach of the Settlement Agreement, that it follows that this unilateral attempt by PEL to set aside those provisions of the Settlement Agreement which had adjusted FHL's costs contributions in respect of Badin to zero and to reinstate them as if FHL was now in default was entirely unjustified, misconceived and lacking in any legal basis.

540. Even if there was some breach of the Settlement Agreement by the Claimants or either of them, the normal remedy would be damages rather than a unilateral termination of an agreement which can only arise in very limited circumstances depending upon how critical the broken contractual term is, or the nature, seriousness and consequences of the breach. None of these legal issues arise in the present case because of my finding that there was no breach of the Settlement Agreement by the Claimants. The contention that PEL was entitled to reverse the Carried Costs and subsequently forfeit FHL' s interests in Badin is particularly difficult to understand when one appreciates the extent to which the Settlement Agreement provided, in effect, that even if the assignments of the legal titles to the Working Interests in question were held up, PEL was nonetheless in as good a position as it would have been in if the legal title had been transferred to the SPV (and the latter then transferred to PEL). …

544. It is extremely difficult to understand how PEL in such circumstances thought it had an entitlement to invoke the non-transfer of the legal title to the Working Interests as a ground to seek to set aside critical and fundamental provisions of the Settlement Agreement and to seek to reimpose costs and liabilities on the Claimants which had been expressly agreed in the Settlement Agreement were not to be imposed.

545. The Respondent has sought to rely upon Clause 2.8(d) of the Settlement Agreement in support of its contention that the position of the parties in relation to the Carried Costs should be restored to the state they were prior to the date of the Settlement Agreement. However, this contention rests on a misreading of Clause 2.8(d).

546. The provisions of Clause 2.8(d) are only engaged if both of two pre-conditions are satisfied. The first is that FHL " ceases to be legally permitted to holding the Kandra Discovery Area Working Interest in trust for PEL ... for whatever reason " other than the completion of the transfers. However, there is no evidence that FHL has ceased to be legally permitted to hold the Kandra Discovery Area Working Interest in trust for PEL. …

554. Even if they were, the specified consequence would be that " FHL's Liabilities and obligations under the Kandra Farm-In Agreement will stand restored to the state prior to the date or this Agreement ". While that would revive FHL's rights and obligations under the Kandra Farm-In Agreement, there would be no effect on the other assets such as Badar and the Badin Assets. Accordingly, the provisions of Clause 2.8(d), even if the pre-conditions were satisfied, would not entitle PEL to reverse the Carried Costs in relation to the Badin Assets. Nor does the purported reversal take account of the fact that all the old disputes resolved by the Settlement Agreement would revive, and that the outcome of those disputes is uncertain and not something I can resolve.” iv) In consequence of these findings, PEL’s counterclaim based on the alleged but rejected breach of contract by FHL and/or Spud was dismissed – see Award, [569]; and v) FHL’s damages claim succeeded because “…(c)onsistent with its position that it had forfeited FHL's Working Interest in Badin South, PEL excluded FHL from the calculation of the gas sales due to the Working Interest owners from November 2022 onwards …” – see Award, [623] – [624]; vi) On this basis, the damages due to FHL were to be assessed by reference to the amount wrongfully withheld, which the Arbitrator calculated at US$2,482,616 and held to be “… a direct loss incurred by FHL as a consequence of PEL's breach of the Settlement Agreement and I am satisfied that FHL is entitled to an award of damages in this amount …” – see Award, [626] – and FHL was entitled on that basis to interest thereon – see Award, [628]; and vii) In addition, for the same reasons, FHL was held to be entitled to “… its proportionate share of any further and continuing payments in respect of sales of gas from Badin IV-South from August 2023 onwards and, if production commences, from Badin-IV North …” – see Award [627].

34. PEL challenges the jurisdiction of the Arbitrator to grant the declaratory remedies referred to earlier notwithstanding his unchallenged conclusions as to breach, and to award damages or to do so assessed in the manner he adopted.

35. Since this is a re-hearing of, rather than an appeal from the Arbitrator’s conclusions concerning, the jurisdiction challenge, it is not necessary to dwell in any detail on the Arbitrator’s conclusions concerning jurisdiction other than to record that they are set out in the Award at [555]-[568] and that he rejected PEL’s jurisdiction case because: “560. In essence therefore, the dispute between the parties is whether or not PEL was entitled to go behind the Settlement Agreement, reverse the adjustment to the Carried Costs provided for in the Settlement Agreement, reinstate what were in any event disputed cash call obligations that were alleged to exist prior to the Settlement Agreement and to charge interest to the Claimants as if the Settlement Agreement had been set at nought and as if the dispute about the 2015 cash calls had been or should be treated as having been resolved in favour of PEL.

561. In my view, this is a dispute which arises entirely from the terms of the Settlement Agreement and whether or not the Claimants were, as alleged by PEL, in breach of the Settlement Agreement. The fact that PEL invoked provisions of the Badin-IV North JOA to issue a cash call and then a Notice of Default is merely the mechanism PEL employed in an attempt to implement what it saw as the consequences of the Claimants' alleged breach of the Settlement Agreement. The Arbitration Agreement contained in Section 5.7 of the Settlement Agreement covers "a dispute [which] arises between the Parties with respect to any matter under this [Settlement] Agreement and/or the Settlement Transaction.

562. In my view, the dispute as to whether or not PEL was entitled to reverse the relevant provisions of the Settlement Agreement and thus seek to ultimately forfeit the Claimants' relevant Working Interest is a dispute "with respect to any matter arising under this Agreement." I am quite satisfied that the resolution of that dispute (including the validity of the attempt to forfeit the Claimants' Working Interests) falls within that arbitration agreement and therefore within my jurisdiction.”

36. Before turning to my conclusions on the central issue between the parties I should record that I agree with the Arbitrator on one subsidiary point that he made relating to jurisdiction, albeit for different reasons. At Award, [564], the Arbitrator concluded that the Singapore Arbitration was of no relevance because the Tribunal in the Singapore Arbitration had concluded that it had no jurisdiction. As recorded earlier, that decision was reversed by the Singapore International Commercial Court. However, in my judgment this is immaterial for present purposes because, as stated above, the same dispute is capable of giving rise to a breach of both the Settlement Agreement and the JOAs and therefore to an entitlement to similar or largely similar remedies. Determination of the Jurisdiction Issue

37. It is necessary to start with the correct construction of the arbitration agreement contained in the Settlement Agreement.

38. The principles that apply to the construction of an arbitration agreement governed by English law are those that apply to all contracts governed by English law but taking account of one presumption that applies (at any rate in some circumstances) to the construction of arbitration agreements.

39. As a matter of general principle, where the parties have used unambiguous language in their arbitration agreement, the Court must apply it as it must with any other contract - see Rainy Sky SA v Kookmin Bank [2011] UKSC 50 ; [2011] 1 WLR 2900 per Lord Clarke JSC at paragraph 23 – and should not reject the natural meaning as incorrect simply because it appears to be an imprudent term for one of the parties to have agreed, even ignoring the benefit of the wisdom of hindsight - see Arnold v Britton [2015] UKSC 36 ; [2015] AC 1619 per Lord Neuberger PSC at paragraph 20 and Wood v Capita Insurance Services Ltd [2017] UKSC 24 ; [2017] AC 1173 per Lord Hodge JSC at paragraph 11. This is all the more the case where the agreement in issue is a sophisticated, complex agreement drafted by skilled professionals, as is the Settlement Agreement. Such agreements are likely to be interpreted principally by textual analysis unless a provision lacks clarity or is apparently illogical or incoherent - see Wood v Capita Insurance Services Ltd ibid per Lord Hodge JSC at paragraph 13 and National Bank of Kazakhstan v Bank of New York Mellon [2018] EWCA Civ 1390 per Hamblen LJ at paragraphs 39 to 40. Overall, applying these principles, the ultimate question that arises is what a reasonable person with all the background knowledge which would have reasonably been available to the parties when they entered the contract, would have understood the language used by the parties to mean. As I have said already, this is so in relation to arbitration agreements as to any other commercial agreement.

40. Aside from these general principles of construction, it may be necessary to take account of the presumption identified by the House of Lords in Fiona Trust and Holding Corp and others v Privalov and others [2007] UKHL 40 , [2007] Bus LR 1719 at [13]. In that case the issue concerned an all or nothing jurisdiction dispute as to whether arbitrators had jurisdiction to decide whether a number of charterparties were void as having been induced by bribery. The dispute resolution agreement in each charterparty provided that “… any dispute arising under this charter …” was to be decided in England, with either party having the right to elect to have any such dispute referred to arbitration.

41. The House of Lords concluded that the bribery dispute was one that an arbitral tribunal appointed in accordance with the parties’ agreement had jurisdiction to determine. In reaching that conclusion, Lord Hoffmann gave the lead opinion, in the course of which he held: “6 In approaching the question of construction, it is therefore necessary to inquire into the purpose of the arbitration clause. As to this, I think there can be no doubt. The parties have entered into a relationship, an agreement or what is alleged to be an agreement or what appears on its face to be an agreement, which may give rise to disputes. They want those disputes decided by a tribunal which they have chosen, commonly on the grounds of such matters as its neutrality, expertise and privacy, the availability of legal services at the seat of the arbitration and the unobtrusive efficiency of its supervisory law. Particularly in the case of international contracts, they want a quick and efficient adjudication and do not want to take the risks of delay and, in too many cases, partiality, in proceedings before a national jurisdiction. 7 If one accepts that this is the purpose of an arbitration clause, its construction must be influenced by whether the parties, as rational businessmen, were likely to have intended that only some of the questions arising out of their relationship were to be submitted to arbitration and others were to be decided by national courts. Could they have intended that the question of whether the contract was repudiated should be decided by arbitration but the question of whether it was induced by misrepresentation should be decided by a court? If, as appears to be generally accepted, there is no rational basis upon which businessmen would be likely to wish to have questions of the validity or enforceability of the contract decided by one tribunal and questions about its performance decided by another, one would need to find very clear language before deciding that they must have had such an intention. 8 A proper approach to construction therefore requires the court to give effect, so far as the language used by the parties will permit, to the commercial purpose of the arbitration clause. … ”

42. Having rejected a substantial body of previous case law which had resulted in highly artificial constructions of arbitration agreements based on wafer thin textual differences, Lord Hoffmann concluded at [13] that: “In my opinion the construction of an arbitration clause should start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal. The clause should be construed in accordance with this presumption unless the language makes it clear that certain questions were intended to be excluded from the arbitrator’s jurisdiction.”

43. That presumption is particularly strong where, as in this case, the dispute- resolution clause is in a contract entered into to resolve disputes under an earlier contract – see Yegiazaryan v Smagin [2016] EWCA Civ 1290 per Beatson LJ at [44], approving Monde Petroleum SA v Westernzagros Ltd [2015] EWHC 67 (Comm) ; [2015] 1 Lloyd’s Rep 330 per Popplewell J (as he then was) at [38], where he held that: “The presumption in favour of one-stop adjudication may have particular potency where there is an agreement which is entered into for the purpose of terminating an earlier agreement between the same parties or settling disputes which have arisen under such an agreement. Where parties to a contractual dispute enter into a settlement agreement, the disputes which it can be envisaged may subsequently arise will often give rise to issues which relate both to the settlement agreement itself and to the previous contract which gave rise to the dispute. It is not uncommon for one party to wish to impeach the settlement agreement and to advance a claim based on his rights under the previous contract. In such circumstances rational businessmen would intend that all aspects of such a dispute should be resolved in a single forum. Where the settlement/termination agreement contains a dispute resolution provision which is different from, and incompatible with, a dispute resolution clause in the earlier agreement, the parties are likely to have intended that it is the settlement/termination agreement clause which is to govern all aspects of outstanding disputes, and to supersede the clause in the earlier agreement, for a number of reasons. Firstly it comes second in time and has been agreed by the parties in the light of the specific circumstances which have given rise to the disputes which are being settled and/or the circumstances leading to the termination of the earlier agreement. Secondly it is the operative clause governing issues concerning the validity or effect of the termination/settlement agreement and therefore the only clause capable of applying to disputes which arise out of or relate to the termination/settlement agreement. Thirdly, in considering any dispute about the scope or efficacy of a settlement or termination agreement, the tribunal is likely to have to consider the background, of which an important element will often be the circumstances in which the dispute arose and the rights of the parties under the earlier contract. There will therefore often arise a risk of inconsistent findings if the tribunal addressing the validity or efficacy of the termination/settlement jurisdiction is not seised of disputes arising out of the earlier contract and the latter fall to be determined by a different tribunal.

39. In such circumstances, therefore, the dispute resolution clause in the termination/settlement agreement should be construed on the basis that the parties are likely to have intended that it should supersede the clause in the earlier agreement and apply to all disputes arising out of both agreements.” There is no reason in principle why this approach should not apply where the Settlement Agreement in dispute resolves past disputes with the antecedent agreements continuing to govern the parties’ future commercial relationships. Similarly, whilst the dispute in Fiona Trust (ibid.) was concerned with a dispute about the validity of the contract which contained the dispute resolution provisions referred to above, that is immaterial.

44. The general principles identified by Lord Hoffmann at [6] apply to the Settlement Agreement in this case as they do to most if not all arbitration agreements contained in commercial agreements. In consequence it is highly improbable that a reasonable person with all the background knowledge which would have reasonably been available to the parties when they entered the Settlement Agreement would conclude that the parties had intended that all issues concerning breach (and presumably causation as well) would be decided by an arbitral tribunal appointed under the arbitration agreement contained in the Settlement Agreement but some issues concerning the remedies to which an innocent party was entitled would be resolved by another tribunal appointed under an antecedent agreement. Such a person would be almost bound to conclude that the parties intended a one stop method for adjudicating on all aspects of all disputes arising under the Settlement Agreement.

45. There is no rational basis for reaching any other conclusion. If all issues concerning breach and causation were resolved by arbitration under the Settlement Agreement, it is difficult to see what could justify either the delay or cost in having a further arbitration under a different agreement with a differently constituted tribunal to resolve what the consequences of those findings should be or why either party at the time they entered the Settlement Agreement could have intended such an outcome. As Lord Hope put it in Fiona Trust (ibid.) at paragraph 28, “…(i)f the parties have confidence in their chosen jurisdiction for one purpose, why should they not have confidence in it for the other? Why, having chosen their jurisdiction for one purpose, should they leave the question which court is to have jurisdiction for the other purpose unspoken, with all the risks that this may give rise to? For them, everything is to be gained by avoiding litigation in two different jurisdictions .”

46. If, as Lord Hoffmann concluded, “… there is no rational basis upon which businessmen would be likely to wish to have questions of the validity or enforceability of the contract decided by one tribunal and questions about its performance decided by another …” it is difficult to see why that would be any different in a case such as this where it is contended that breach and causation should be resolved by one tribunal but remedies decided by another tribunal appointed under different arbitration agreements in different contracts. In my judgment the outcome is or should be exactly the same. In either case, very clear language would be required before a court could sensibly conclude that the parties must have had such an intention. That is all the more the case where, as here, (i) the agreement in issue is a sophisticated, complex agreement drafted by skilled professionals, where textual analysis is likely to be the principal source of interpretation; (ii) the arbitration agreement is contained in a settlement agreement; (iii) it is conceded that at least some remedies should be decided by the Arbitrator in any event; and (iv) not all the parties to the Settlement Agreement were parties to the JOA or other antecedent agreements relied on by PEL.

47. The claimant submits that the Fiona Trust principle is of limited importance in the circumstances of this case applying authorities such as C v D1, D2, D3 [2015] EWHC 2126 (Comm) which concern two or more agreements governing the continuing relationship of the parties. I do not accept this submission. There is a plain distinction to be drawn between (i) a matrix of different contracts entered into at or about the same time, governing different aspects of the parties’ relationship, where it may be relatively straightforward to conclude that the parties intended different dispute resolution mechanisms to apply to different aspects of their relationship and (ii) a situation like this where the agreement that it is alleged has been breached was entered into years after the original agreements in settlement of earlier disputes. In my judgment in the latter situation, the principle identified in Fiona Trust (ibid.) as augmented by Popplewell J in Monde Petroleum (ibid.) is the one that applies albeit subject to the conventional construction principles to which I referred earlier. I have explained in detail already the complex reset of the parties’ relationship achieved by the Settlement Agreement. I return to that issue again below. However, in my judgment, that reset represented an obvious fundamental shift in the parties’ relationship in respect of the disputes the subject of the Settlement Agreement which points firmly to the conclusion that all disputes arising out of the alleged breach of the Settlement Agreement would be resolved in accordance with the dispute resolution machinery contained in that agreement.

48. For similar reasons, I conclude that PEL’s reliance on Trust Risk Group SpA v AmTrust Europe Limited [2015] EWCA Civ 437 is mistaken. Even if this view is wrong and in this case it is appropriate to enquire “… under which of a number of inter-related contractual agreements a dispute actually arises, and seeking to do so by locating its centre of gravity and thus which jurisdiction clause is “closer to the claim”” I consider applying that test would yield the same outcome in essence because the dispute between the parties concerned a claim by FHL and Spud that PEL had breached the terms of the Settlement Agreement, and the purpose of the disputed declarations was to place FHL and Spud in the position they would have been in had PEL not breached the Settlement Agreement and taken various steps it was not entitled to take on the basis of its misplaced assertion that it was FHL and/or Spud that had breached the terms of the Settlement Agreement.

49. I also consider PEL’s reliance on Trust Risk Group (ibid.), and the conclusion of Hamblen LJ (as he then was) in BNP Paribas SA v Trattamento Rifiuti Metropolitani SPA [2019] EWCA Civ 768 at [71] that even broadly expressed arbitration agreements may not naturally extend to claims under different contracts, to be mistaken because it is artificial and wrong for PEL to characterise FHL’s claims as being made under two or more different contracts. In the London Arbitration FHL made one claim for breach of a single contract – the Settlement Agreement – with the disputed declarations being sought as remedies giving effect to the Arbitrator’s conclusion that PEL had acted in breach of the terms of the Settlement Agreement.

50. I return now to the language used by the parties. This requires that if “… a dispute arises between the Parties with respect to any matter arising under this Agreement and/or the Settlement Transaction, the Parties shall attempt to resolve all of the items in dispute as may be set out in any objection notice delivered by the disputing party within 30 days of receipt of the objection notice by the non-disputing party. Any items in dispute not resolved within such 30 day period shall be settled by arbitration in London, England, conducted under the Rules of Arbitration of the ICC …” I construe the word “ items” as meaning “matters” and the phrase “… Any items in dispute…” referred to in the final sentence as referring back to the phrase “… a dispute … between the Parties with respect to any matter arising under this Agreement and/or the Settlement Transaction…” used in the first sentence other, obviously, than one the parties have been able to resolve by agreement within the 30 day negotiated dispute resolution period.

51. There is nothing in this language that even hints at an intention to exclude some remedial issues from resolution by the tribunal appointed under this provision. The Recitals in the Settlement Agreement suggest no other intention, nor is there anything within the definitions used in the Settlement Agreement that suggests any other conclusion. These factors, in combination with (a) the textually wide meaning of the phrase “ any matter arising …”; and (b) the Settlement Agreement being a classic example of a sophisticated, complex agreement drafted by skilled professionals, lead me to conclude that it was intended by the parties that all disputes arising under or arising as a result of an alleged breach of the Settlement Agreement would be resolved on a one stop basis by an arbitrator appointed under the arbitration agreement contained in the Settlement Agreement.

52. In my judgment it is an artificial construct to maintain that the subject matter of the disputed declarations are disputes under the JOAs. The claims between the parties concerned allegations of breach of the Settlement Agreement by FHL and Spud against PEL and a counterclaim in damages by PEL. The claim succeeded and the counterclaim was dismissed. The disputed prayers for relief were remedies that followed not as claims under the JOAs but because of a failure on the part of PEL to give effect to what had been agreed in the Settlement Agreement.

53. The declarations were of what PEL was required to do in order to place FHL and Spud in the position they would have been had PEL not breached the terms of the Settlement Agreement. That much is clear from the unchallenged and unchallengeable findings of fact made by the Arbitrator summarised earlier. It is also clear from the fact that, by the Settlement Agreement, the parties had (i) amended the joint venture accounts the subject of the arbitrations that were compromised; (ii) agreed that the forfeiture and default notices were to be treated as withdrawn and any payment due as a result of these notices having been given cancelled; and (iii) released any claims arising out of what are defined in the Settlement Agreement as the JOA Dispute. The declarations reverse the failure on the part of PEL to give effect to what had been agreed because of PEL’s misplaced assertion that FHL and/or Spud were in breach of the Settlement Agreement not PEL. It is difficult to see how the Arbitrator could have resolved the matter in dispute other than by granting the declarations sought. It follows that the declaratory relief was relief which the Arbitrator had jurisdiction to grant and to which FHL and Spud became entitled as a result of the Arbitrator’s conclusions on liability. Declarations are a discretionary remedy but that is not to the point because this is a jurisdictional challenge not an AA96 s68 or s.69 challenge.

54. It follows that even if the entitlement of FHL and/or Spud to the challenged relief could have been made good in an arbitration under the JOAs that is nothing to the point if (as I conclude was the case) FHL and/or Spud were entitled to claim substantially the same relief as a result of the breach of contract they proved against PEL.

55. At this stage it is necessary that I mention PEL’s reliance on a Gas Sales and Purchase Agreement (“GSPA”). The GSPA is concerned with the sale of gas extracted from the Badin IV South block, to which PEL and FHL are parties as sellers. That agreement is subject to an arbitration agreement requiring any relevant dispute to be referred to arbitration in accordance with Pakistan’s Arbitration Act 1940.

56. PEL submits that disputes that relate in any way to the GSPA should not be treated as falling within the scope of the arbitration agreement within the Settlement Agreement. FHL takes objection to this point being relied on at all. It was not relied on before the Arbitrator; it was not pleaded in the Claim Form or the Claim Form as amended; and appears to have surfaced first only in the skeleton filed on behalf of PEL for this hearing.

57. FHL maintains that permission is required by PEL to rely on this point at all because it is raised for the first time outside the 28 day time limit established by AA96, s.70(3) for challenging the Award; that PEL’s reliance on this objection is barred by AA, s.73; but in any event that the point is substantively one that is bound to fail.

58. AAS96, s.73 provides that: “(1) If a party to arbitral proceedings takes part, or continues to take part, in the proceedings without making, either forthwith or within such time as is allowed by the arbitration agreement or the tribunal or by any provision of this Part, any objection— (a) that the tribunal lacks substantive jurisdiction … he may not raise that objection later, before the tribunal or the court, unless he shows that, at the time he took part or continued to take part in the proceedings, he did not know and could not with reasonable diligence have discovered the grounds for the objection.” The point I am now considering is one that is argued by PEL to be material to the conclusion of the Arbitrator that FHL was entitled to recover damages because “… PEL excluded FHL from the calculation of the gas sales due to the Working Interest owners from November 2022 onwards…” .

59. Before a party can rely on a challenge to an arbitral tribunal’s jurisdiction, “…(t)he substance of each ground of objection relied upon should have been communicated to the other party (and the arbitral tribunal) ” – see National Iranian Oil Co v Crescent Petroleum Co International Ltd [2022] EWHC 2641 (Comm) ; [2023] Bus LR 235 per Butcher J at [36(7)]. As Butcher J added in the same paragraph “… (i)t would be unfair if a party took part in arbitration yet kept an objection up his sleeve and only attempted to deploy it later …” and “…(i)t is not enough that the party mention an issue; the issue must be distinctly put to the arbitral tribunal as denying jurisdiction .” This approach was followed by Foxton J in Czech Republic v Diag Human SE [2024] EWHC 503 (Comm) ; [2024] Bus LR 929 at [70].

60. FHL’s case is that the GSPA argument is not one that is available to PEL because it had not been raised at any relevant stage before the service of the skeleton in these proceedings. PEL maintains this is wrong because there was a single jurisdictional challenge in the Claim Form to the effect that all the challenged elements of the Award (including the damages claim) were ones that the Arbitrator lacked jurisdiction to determine because “… these were not matters which had been submitted to arbitration in accordance with the Settlement Agreement arbitration agreement .” Whilst I consider this issue is one that is close to the borderline, I am prepared to accept that PEL’s challenge to jurisdiction was generic in the sense that there is no material difference between the points made by reference to the JOAs and the point now made by reference to the GSPA.

61. However, whilst I am prepared to permit PEL to advance this point, in my judgment it does not assist because it fails for essentially the same reasons that the challenge to the challenged declarations fails – the Award does not determine a claim under the GSPA or purport to do so. As set out in detail above, the Arbitrator awarded damages to FHL for breach by PEL of the Settlement Agreement, which he quantified in the sum of US$2,482,616, being the sums which should have been but were not paid to FHL in respect of Badin IV South gas sales for the period from November 2022 until July 2023. There can be no sensible dispute that the Arbitrator had jurisdiction to award damages for breach of contract under the arbitration agreement contained in the Settlement Agreement. The criticism that it receives only limited mention in the Award is immaterial: this is a jurisdictional challenge not a AA96, s.68 challenge. The dispute in truth is not to jurisdiction at all but to the method by which the Arbitrator quantified damages. That is of itself a sufficient reason for rejecting this point.

62. More generally, this element of the dispute is not concerned with a failure to issue invoices. It is an allegation that in breach of the Settlement Agreement, PEL purported to forfeit FHL's Working Interest in Badin South and, as a consequence, wrongfully excluded FHL from the calculation of the gas sales due to the Working Interest owners from November 2022 onwards. It was not suggested that there was any independent reason entitling PEL to act as it did. As the Arbitrator held at [626] of the Award, the sum withheld was a direct loss incurred by FHL as a consequence of PEL's breach of the Settlement Agreement. It was for that reason that PEL’s claim to be entitled to withhold the sums due was a dispute under the Settlement Agreement and thus a dispute the Arbitrator had jurisdiction to determine. Conclusions on Jurisdiction

63. For the reasons set out above, the jurisdictional challenge fails and the 13 Claim is dismissed. The 307 Claim

64. My understanding is that the parties are agreed that if the jurisdiction challenge was to fail then the relief sought in the 307 Claim would follow with the sum claimed by way of damages being agreed in the sum of £50,000. I am in any event satisfied that it is appropriate to grant final anti-suit injunction relief restraining the continuation or commencement of any fresh proceedings in breach of the arbitration agreement within the Settlement Agreement. The well-known tests that apply for the grant of such an order are amply met in the circumstances of this case.