Enforcement of arbitral awards: Award creditor successfully seeks remedy from European court of Human Rights for Albania’s extraordinary delay in recognising arbitral award

The European Court of Human Rights (the ECtHR) has found that in delaying recognition of an arbitral award against it, the Republic of Albania breached its obligations under Article 6 (Right to a Fair Trial) of the European Convention on Human Rights (ECHR). Article 6(1) states that proceedings must be determined “within a reasonable time”. Iliria SRL (Iliria) spent 17 years and 9 months attempting to obtain legal recognition of an arbitral award in the Albanian domestic courts. After various proceedings in the Tirana Court of Appeal, the Albanian Supreme Court and the Albanian Constitutional Court, recognition of the arbitration award was denied on public policy grounds. Iliria successfully argued that Albania had breached its obligations under Article 6(1) by failing to resolve Iliria’s application within a reasonable time and was awarded compensation of €10,800.

While the ECtHR did find in favour of Iliria, it is questionable whether this route provides an effective remedy for delays and non-enforcement of awards by domestic courts. Iliria’s application to the ECtHR took 8 years to be determined and Iliria was awarded less than the sum claimed. Award creditors have also looked to claims under investment treaties to address difficulties in recognition and enforcement of awards. This route, where available, appears to provide a more effective remedy.

Continue reading

Inside Arbitration Podcasts: Clause and Effect: Unicredit, Enka and the Arbitration Bill

Join Liz Kantor, Vanessa Naish, and guest, Hannah Ambrose in the third episode of our Inside Arbitration Podcasts series as they delve into the Court of Appeal’s judgment in the Unicredit v RusChemAlliance case. They unravel why the governing law of the arbitration agreement mattered in that case, and why this remains such a topic of debate in the arbitration community. They will consider how the current position in Enka v Chubb looks set to change in the draft English Arbitration Bill and address the ramifications of that change for anti-suit relief from the English court in support of foreign seated arbitrations.


This podcast is also available on iTunes and Spotify.


For more information, please contact Hannah Ambrose, Partner, Vanessa Naish, Professional Support Consultant, Liz Kantor, Professional Support Lawyer, or your usual Herbert Smith Freehills contact.

Hannah Ambrose
Hannah Ambrose
Partner
+44 20 7466 7585
Vanessa Naish
Vanessa Naish
Professional Support Consultant
+44 20 7466 2112
Elizabeth Kantor
Elizabeth Kantor
Professional Support Lawyer
+44 20 7466 2406

ANTI-SUIT INJUNCTIONS IN RESPECT OF RUSSIAN PROCEEDINGS: ENGLISH COURT OF APPEAL APPLIES ENKA V CHUBB AND ALLOWS THE FINAL ANTI-SUIT INJUNCTION IN THE RUSCHEMALLIANCE TRILOGY

In the recent decision in Unicredit Bank GmbH v RusChemAlliance LLC [2023] EWCA Civ 64, the English Court of Appeal (the Court) reversed the decision of the High Court at first instance and granted a final anti-suit injunction (ASI). The ASI requires RusChemAlliance LLC (RCA) to terminate proceedings brought in Russia in breach of an English-law governed arbitration agreement providing for arbitration seated in Paris. The decision is the latest in a series of applications on materially the same facts in which the English courts have been requested to grant an ASI preventing RCA from bringing Russian proceedings in breach of English-law governed arbitration agreements. We considered those decisions, alongside the first instance decision of Tear J in this case, in a previous post here.

Continue reading

Cross-Post: ISDS policy trend round up for 2023

What are the trends in investor state dispute resolution at a macro level that have developed over 2023? We have put together a round-up which has been posted in full on the PIL Notes blog here.

For further information, please contact Andrew Cannon, Partner, Christian Leathley, Partner, Hannah Ambrose, Partner, Vanessa Naish, Professional Support Consultant,  Liz Kantor, Professional Support Lawyer, or your usual Herbert Smith Freehills contact.

Andrew Cannon
Andrew Cannon
Partner
+44 20 7466 2852
Christian Leathley
Christian Leathley
Partner
+44 2074663002
Hannah Ambrose
Hannah Ambrose
Partner
+44 20 7466 7585
Vanessa Naish
Vanessa Naish
Professional Support Consultant
+44 20 7466 2112
Elizabeth Kantor
Elizabeth Kantor
Professional Support Lawyer
+44 20 7466 2406

 

CROSS POST: STATE IMMUNITY PREVAILS: UK COURT OF APPEAL DENIES ANTI-SUIT INJUNCTION AGAINST VENEZUELA

In a significant ruling in the case of UK P&I Club & Anor v Republica Bolivariana de Venezuela [2023] EWCA Civ 1497, the UK Court of Appeal has upheld the principle of state immunity, denying an anti-suit injunction against Venezuela in a commercial dispute. This decision emphasises the UK’s adherence to international comity and the delicate balance between upholding domestic policy (in this case, allowing states immunity against the grant of injunctions) and the rights enshrined in Article 6 of the European Convention on Human Rights regarding access to justice. The judgment has significant implications for the scope of state immunity in commercial transactions and the strategy to be adopted by parties faced with states who breach arbitration agreements. Partner Hannah Ambrose, Professional Support Consultant Vanessa Naish and Professional Support Lawyer Liz Kantor consider the decision in a post on our Public International Law Notes blog here.

Continue reading

ENGLISH HIGH COURT GRANTS ANTI-SUIT AND ANTI-ANTI-SUIT INJUNCTIONS TO RESTRAIN RUSSIAN PROCEEDINGS BROUGHT BY SANCTIONED ENTITIES

In Renaissance Securities (Cyprus) Ltd v Chlodwig Enterprises Ltd & Others [2023] EWHC 2816 (Comm), the English High Court granted an anti-suit injunction (an ASI) to restrain Russian court proceedings brought by sanctioned counterparties. The Russian proceedings were brought in breach of a London seated LCIA arbitration clause, with the intention to benefit from the Russian law which allows the Russian courts to take exclusive jurisdiction over cases which involve sanctions. The English Court also granted an anti-anti-suit injunction (an AASI) to restrain the sanctioned entities from seeking countermeasures before the Russian court. This decision illustrates the importance of ASIs and AASIs as tools to try to ensure that arbitration agreements are enforced. This judgment follows hot on the heels of applications for ASIs in the English courts brought (with mixed success) by Deutsche Bank, Commerzbank and Unicredit respectively (see our blogpost here), as well as an interim ASI obtained by a German contractor, Linde from the Hong Kong courts pending an HKIAC arbitration (see our blogpost here).

Continue reading

ENGLISH HIGH COURT DISMISSES RUSSIA’S JURISDICTIONAL CHALLENGE ON BASIS OF STATE IMMUNITY IN YUKOS CASE

On 1 November 2023, in Hulley v Russian Federation [2023] EWHC 2704 (Comm), Mrs Justice Cockerill in the English High Court (the Court) dismissed a jurisdictional challenge brought by the Russian Federation (Russia) in proceedings for the enforcement of two arbitral awards issued in favour of the former majority shareholders in OAO Yukos Oil Company (Yukos) for an amount exceeding US$50 billion. Continue reading

UPDATE: THE WINNER LOSES IT ALL? ENGLISH COURT UPHOLDS NIGERIA’S CHALLENGE TO $11bn AWARDS IN 140 PAGE MEGA-JUDGMENT

Observing that “the facts and circumstances of this case… are remarkable” and that he did not do so “without reluctance” Knowles J upholds challenge to tribunal’s awards but leaves their ultimate fate open.

In the latest decision in a decade long case that has already seen Nigeria granted an “unprecedented” extension of almost three years to bring a challenge to awards in a London-seated arbitration (see our previous post), the Commercial Court has upheld (in part) Nigeria’s challenge under s68 of the Arbitration Act (the 1996 Act) to awards given in favour of Process and Industrial Developments Ltd (PI&D). The Court found that the awards were obtained by fraud and the awards were, and the way in which they were procured was, contrary to public policy. Despite finding in Nigeria’s favour, Knowles J did not address in the judgment how the awards should be dealt with, deciding that he would hear arguments from the parties on this point at a later date.

Continue reading

TRILOGY OF APPLICATIONS FOR ANTI-SUIT INJUNCTIONS – 2 OUT OF 3 AIN’T BAD!

There has been a trilogy of applications for anti-suit injunctions (ASIs) in the English courts brought by three banks (Deutsche Bank, Commerzbank and Unicredit) against RusChemAlliance (RusChem), a joint venture between Gazprom and RusGasDobycha. A fourth ASI against RusChem has also been sought in Hong Kong by the German contractor, Linde. All of the applications related to substantive proceedings brought by RusChem in Russia, ignoring the contractually agreed forum.

These cases illustrate the importance of ASIs as a tool to try to ensure that arbitration agreements are enforced. ASIs have become all the more important in respect of transactions involving Russian parties, given the Russian law which allows the Russian courts to take exclusive jurisdiction over cases which involve sanctions. These cases also demonstrate the English courts’ approach to ASI applications where the seat of the arbitration is not in England and Wales. Continue reading