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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In Paloma Co. Ltd. v. Capxon Electronic Industrial Co. Ltd [[2018] HKCFI 1147], the Hong Kong Court of First Instance rejected a public policy challenge to a New York Convention Award rendered by a tribunal in Japan. The Respondent applied to set aside leave to enforce the Award, alleging that the tribunal’s conduct was biased, and violated basic concepts of morality, justice and public policy.

Deputy Judge Keith Yeung found that there was no evidence of bias on the part of the tribunal, nor any error or matter which would warrant setting aside the award. Yeung DJ relied on Hebei Import & Export Corp. v Polytek Engineering Co. Ltd. [(1999) 2 HKCFAR 111] to reiterate that, in order to refuse enforcement of an award under the New York Convention, the award must be so fundamentally offensive to the jurisdiction’s notions of morality and justice that this could not reasonably be overlooked. In the absence of such conflict, the Court would not look into the merits, nor review any alleged errors or reasoning of the tribunal.

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Indian Courts settle key issues relating to enforcement of awards

In five recent judgments, the Indian courts have offered important guidance on the enforcement of both domestic and international awards in India.

This post first discusses three judgments of the Supreme Court of India (“Supreme Court“), clarifying the interpretation of the Arbitration and Conciliation Act, 1996 (“Arbitration Act“), in light of recent amendments intended to simplify the enforcement process.

Next, the post covers two judgments of the Delhi High Court and Rajasthan High Court on challenges to enforcement of awards, which offer useful guidance on the courts’ approach to issues of public policy.

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Delhi High Court allows enforcement of arbitral awards despite foreign exchange regulations

Two recent judgments from the Delhi High Court affirm the court's pro-enforcement stance on foreign arbitral awards and offer welcome guidance on the exit rights of foreign investors in Indian companies, an important subject for many companies looking to invest in India.  In the dispute between Tata Sons and Tata Teleservices ("Tata") and NTT Docomo Inc ("Docomo"), the court ruled that the Reserve Bank of India did not have standing to prevent enforcement of a foreign award between two private parties on grounds of Indian public policy.  In a similar case (Cruz City 1 Mauritius Holdings v Unitech Limited), the court dismissed a challenge to enforcement by an award debtor arguing that a foreign award was contrary to Indian foreign exchange regulations.

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French Conseil d’État rules on scope of powers to set aside arbitral awards / Le Conseil d’État s’est prononcé sur l’étendue de son contrôle s’agissant de l’annulation d’une sentence arbitrale internationale

In a decision of 9 November 2016, the French Conseil d’État, France's highest administrative jurisdiction, ruled on the extent of its scope of review as regards annulment of an international arbitral award. The decision relates to an ICC arbitral award made in Paris arising from a dispute between Fosmax, subsidiary of French power utility Engie (formerly GDF), and construction consortium STS.  The Conseil d’État's decision represents the latest in a series of cases following the "INSERM" decision (referred to in our blog post here), giving administrative authorities jurisdiction over appeals of international arbitration awards issued in France which relate to administrative contracts. This approach derogates from Article 1519(1) of the French Code of Civil Procedure ("CPC") under which an action to set aside an award is brought before the Court of Appeal of the place where the award was made and seems to establish a dual regime for review of arbitral awards, depending on whether the award involves a public entity.

Please read on for further details and a French-language version of this blog post.

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Arbitration in the Middle East – expectations and challenges for the future

Craig Shepherd and Mike McClure from the HSF office in Dubai have co-edited a TDM (Transnational Dispute Management) Special entitled “Arbitration in the Middle East – expectations and challenges for the future”, that was published today.

The Special considers a number of issues facing arbitration in the Middle East including the proliferation of new arbitral centres, updated statutory regimes to support arbitration and national courts recognising and enforcing arbitral awards.  It also reports on examples of where courts have assumed jurisdiction in spite of arbitration clauses and arbitral awards not being enforced for what appear to be minor procedural defects and public policy considerations that can play a major role in the region.

 A link to the Special is here.

For further information, please contact Craig Shepherd, Partner, Mike McClure, Senior Associate or your usual Herbert Smith Freehills contact.

Craig Shepherd
Craig Shepherd
+971 4 428 6304
Mike McClure
Mike McClure
Senior Associate
+971 4 428 6364

Victorian courts reinforce commitment to international commercial arbitration

Giedo van der Garde BV v Sauber Motorsport AG [2015] VSC 80; Sauber Motorsport AG v Giedo van der Garde BV [2015] VSCA 37

The occasion of the Formula One Grand Prix in Melbourne in mid-March 2015 provided a further opportunity for both the Victorian Supreme Court and the Victorian Court of Appeal to demonstrate its support for international commercial arbitration in Australia. The Court enforced a Swiss arbitral award ordering that an F1 team refrain from taking action which would deprive a driver from his entitlement to participate in the 2015 season as one of its nominated drivers.

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Supreme Court of India Clarifies the Scope of Public Policy grounds for Challenging a Domestic Arbitration Award under Section 34 of the Arbitration and Conciliation Act

In a decision handed down recently, the Supreme Court of India found that the Delhi High Court had overstepped its powers and wrongly set aside a domestic arbitration award. In the process, the Supreme Court has clarified the scope of the “public policy ground” to set aside awards under Section 34(b)(ii) of the Arbitration and Conciliation Act (Act).

The Supreme Court was critical of the Delhi High Court re-opening an arbitrator’s award on merits by reviewing evidence considered by the arbitrator and even considering evidence above and beyond that which the arbitrator had the opportunity to consider. The Supreme Court advocated giving due weight and recognition to a determination by an arbitration – especially on issues of fact. The court recognized that an award could only be set aside on grounds of public policy in very limited circumstances, such as where an award was arbitrary, capricious or such that it would shock the conscience of the court.

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