English High Court refuses to set aside order for enforcement under s103 in long-running dispute regarding ICC award

The English High Court has refused an application under s.103 of the Arbitration Act 1996 (“AA 1996“) to set-aside an order allowing for the enforcement of an ICC award in England. The decision is the culmination of a long-running dispute in which the award debtor has sought to set-aside the award and prevent enforcement in France, the Seychelles and England. The judgement is the latest illustration of the pro-enforcement approach of the English courts with respect to international arbitral awards, particularly where an award debtor has made efforts in multiple jurisdictions to prevent enforcement against it. While the outcome is not surprising, the level of attention given to the grounds raised by the award debtor, even in the face of issue estoppel, demonstrates the importance placed by the English Court on its New York Convention obligations.

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Commercial Court refuses enforcement of arbitral award due to issue estoppel

In Diag Human Se v Czech Republic, the English Commercial Court refused enforcement of a New York Convention Award (the Award) of over 8.3 billion Czech Crowns (approximately GBP245 million) against the Czech Republic, overturning an earlier 2011 English court order (the Order) to the contrary.

Eder J accepted both submissions advanced by the Czech Republic in its challenge to the Order. He found that:

  1. an April 2013 decision by the Supreme Court of Austria that the Award was non-binding created an “issue estoppel” in favour of the Czech Republic; and
  2. even if this reasoning was wrong, the Award was in any event not binding within the meaning of s103(2)(f) of the Arbitration Act 1996 (the Act) given that the arbitration agreement between Diag Human and the Czech Republic provided for a special “review” process that was validly triggered by the Czech Republic after the rendering of the Award.

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