LORD STEYN

My Lords,

1. This appeal raises issues regarding the jurisdiction of arbitrators under the Arbitration Act 1996 which are of great importance for the effective functioning of the statute.

2. It arises from an award made by three experienced ICC arbitrators, sitting in London as the seat of the arbitration, in disputes under a construction contract governed by the law of Lesotho. The arbitrators exercised or purported to exercise two powers under the Arbitration Act 1996 viz to make an award in any currency in terms of section 48(4) and to grant pre-award interest in terms of section 49(3). The relevant provisions read as follows:

48. (1) The parties are free to agree on the powers exercisable by the arbitral tribunal as regards remedies.

(2) Unless otherwise agreed by the parties, the tribunal has the followi ng powers.

(3) . . .

(4) The tribunal may order the payment of a sum of money, in any currency.

(5) . . .

49. (1) The parties are free to agree on the powers of the tribunal as regards the award of interest.

(2) Unless otherwise agreed by the parties the following provisions apply.

(3) The tribunal may award simple or compound interest from such dates, at such rates and with such rests as it considers meets the justice of the case –

(a) on the whole or part of any amount awarded by the tribunal, in respect of any period up to the date of the award;

(b) on the whole or part of any amount claimed in the arbitration and outstanding at the commencement of the arbitral proceedings but paid before the award was made, in respect of any period up to the date of payment.”

The central issue before the House is whether the arbitrators exceeded their powers under section 68(2)(b) of the Act.