UK Supreme Court rules that no security may be ordered when challenging enforcement of arbitration awards

The UK Supreme Court has overturned a Court of Appeal decision requiring Nigerian National Petroleum Corporation ("NNPC") to provide US$ 100m in security while the case was remitted to the Commercial Court to decide on IPCO (Nigeria) Limited's ("IPCO") challenges to enforcement of an award. The Supreme Court held that while the English courts had the express power to make such orders for security under section 103(5) of the Arbitration Act 1996 (the "Act") in the context of an adjournment pending a challenge to the award in the jurisdiction where it was made, the present proceedings rather concerned a challenge to the enforcement of the award under section 103(3) of the Act. As such, no power to order security was available under the Act or the scheme of the New York Convention 1958 (the "Convention").: IPCO (Nigeria) Limited v Nigerian National Petroleum Corporation [2017] UKSC 16.

The Supreme Court also provided guidance on the relationship between the Act and the New York Convention (the "Convention"), on which the relevant sections of the Act are based.

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UK Supreme Court rules on section 69 challenge to an arbitral award: do the courts plan to take a more active role in arbitration?

On 11 May 2016 the Supreme Court handed down a ruling on a challenge to an arbitral award on a point of law, under section 69 of the Arbitration Act 1996. The decision in NYK Bulkship (Atlantic) NV v Cargill International SA [2016] UKSC 20 arose from an arbitral award dated 7 February 2012 ("the Award") relating to the interpretation of an off-hire charterparty clause and raised an important legal question about agency. A decision of the Supreme Court on a challenge to an award is a relatively rare and significant occurrence, and this one comes at a time when the relationship between the English courts and arbitration is the subject of ongoing debate. The case also serves to demonstrate the bar that must be cleared for the court to intervene under section 69.

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