JKD & Anor v IKC
| Judge | Mrs Justice Dias |
| Hearing | 16 July 2026 |
| Judgment | 31 July 2026 |
| Court | Commercial Court, King's Bench Division, Business and Property Courts of England and Wales |
| Jurisdiction | England & Wales |
| Claimants | JKD and GMT, claimants in the arbitration |
| Defendant | IKC, defendant in the arbitration |
| Arbitration | Arbitration in London under the ICC Rules |
| Case reference | CL-2026-000063 |
Summary
A contractor building a power plant terminated its EPC contract for prolonged force majeure and demanded the return of two on demand bonds. The employer disputed the termination and called the bonds the next day. The contractor asked the ICC tribunal for interim measures to withdraw the call. It refused, in Procedural Order No. 4.
The contractor applied to the Commercial Court under section 68 of the Arbitration Act 1996, saying the order was in truth an award and that the tribunal had exceeded its powers and departed from an agreed procedure by applying a threshold higher than the prima facie test. The employer won. The order was not an award, so the application failed at the first hurdle. The judge rejected the remaining grounds too, having said it was not strictly necessary to reach them.
Background and facts
The contractor was engaged under contracts of 5 March 2021 to build a power plant in country C, and procured an advance payment bond and a performance bond in the employer's favour from the issuing bank. A storm hit the site in March 2024, causing delay the contractor puts at substantial. On 3 April 2025 it terminated for prolonged force majeure and demanded the bonds back. The employer called that a repudiatory breach and called the bonds the next day.
The contractor obtained an injunction in Spain restraining the bank from paying, still in force there, and began the arbitration on 15 May 2025. In October 2025 the employer sued the bank here, and the contractor's application to intervene was refused. Its interim measures application followed on 12 November 2025. On an earlier application by the employer the tribunal had recorded that the test for interim relief was generally common ground. On this one it held the relief sought was in substance specific performance, applied a threshold of a particularly strong case, and refused it.
The issue
The contractor said the order finally determined its application and decided where the risk of the bond call fell pending trial, so it was an award whatever its title. It said the parties had agreed on the prima facie test, that this cut down the discretion in Article 28.1 of the ICC Rules, and that departing from it exceeded the tribunal's powers.
The employer said section 68 permits challenges to awards alone, and that there was no such agreement.
The decision
Substance carries real weight and the tribunal's own label never decides the point, but here both pointed the same way. The relief had been described throughout as interim and conservatory, the contractor had told the tribunal it sought no finding on the merits, and the tribunal expressly declined to decide whether the employer could call the bonds. It was not functus officio: it could still hold the calls unlawful and award damages.
The contractor's better argument was that the order settled the contractual allocation of risk pending trial. The court rejected it as circular: risk allocation follows the construction of the contract, which the tribunal had declined to decide.
commercial impact is entirely distinct from substantive determination of a contractual rightMrs Justice Dias, paragraph 23
there is in my judgment no proper basis for saying that PO4 was an award or that any reasonable recipient with all the information available to the parties and the tribunal would have so regarded itMrs Justice Dias, paragraph 28
That disposed of the application. What follows was decided in the alternative, the judge having said it was not strictly necessary to reach the remaining issues.
She could discern no agreement. A proposition recorded as common ground for one application is not a contract binding every application to come, and the tribunal did not think itself bound.
I consider that an agreement must be clear if it is to have the effect of circumscribing the Tribunal's powers or prescribing a particular procedureMrs Justice Dias, paragraph 47
Had the agreement been made out, it would still not have limited the power in Article 28.1. The tribunal had the power to grant or refuse interim measures. Whether it took the right merits threshold was a question of law, and at most an erroneous exercise of a power it possessed. Section 68 reaches neither. Nor was the agreement one as to procedure: section 68(2)(c) is directed at due process.
One finding went the contractor's way and changed nothing: the judge was satisfied substantial injustice would have been shown, the tribunal's own reasons making clear the outcome might well have been different on a lower threshold. Waiver was left undecided.
PO4 is not an award. There was no serious irregularity on the part of the Tribunal whether by exceeding its powers or by failing to conduct the proceedings in accordance with a procedure agreed by the parties. The application accordingly fails.Mrs Justice Dias, paragraph 62
Practical implications
A refusal of interim relief will rarely be an award. It decides nothing substantive, the tribunal stays free to decide the same questions later, and the party refused keeps its claim in damages. However painful the refusal, its consequences do not turn a procedural order into an award.
A position taken for one application does not bind the arbitration. An agreement cutting down a tribunal's discretion has to be clear, and has to reach applications not yet contemplated.
The bond risk sat where the contract put it. The contractor held an injunction effective only in Spain, the employer sued the bank here, and intervention was refused. Interim relief was the last route to stopping payment.
Practice points
- Ask what the ruling disposed of before issuing an arbitration claim. If the tribunal remains free to decide the same issue in the final award, the ruling is a procedural order whatever its commercial effect, and the challenge fails at the threshold with costs.
- Fix the test in writing if you want it fixed. An exchange of submissions citing the same criteria for one application is not a contract about all future applications. Record the threshold as an agreement, say it applies to every application under the relevant article, and get it into a procedural order as a term.
- Your own submissions will be read back to you. Telling the tribunal that you seek no finding on the merits and are preserving the status quo is what defeats the later argument that the ruling was substantive.
- Separate an excess of power from an erroneous exercise of one. A tribunal that applies the wrong test to a power it holds has made an error of law, unappealable under the ICC Rules and unchallengeable under section 68. Almost any error can be redrafted as an excess of power, and the court will not accept the redrafting.
- Plan the bond position across every jurisdiction before terminating. An injunction binding the issuing bank in one country will not stop the beneficiary suing that bank elsewhere, and intervention in those proceedings may be refused. Work out where the bank can be sued, where relief must be sought, and what the claim is worth once the money has gone.