Oliver Marsden and Ella Davies, Freshfields Bruckhaus Deringer LLP
This is an extract from the first edition of GAR’s The Guide to Challenging and Enforcing Arbitration Awards. The whole publication is available here.
Applicable requirements as to the form of arbitral awards
Applicable legislation as to the form of awards
1 Must an award take any particular form (e.g., in writing, signed, dated, place, the need for reasons, delivery)?
The parties are free to agree on the form of an award. Absent such agreement, Sections 52(3) to 52(5) of the Arbitration Act 1996 (the Act; all statutory references that follow are to the Act unless otherwise indicated) state that an award must be in writing signed by all arbitrators or all those assenting to the award. The award should contain reasons, unless the parties have agreed to dispense with reasons or it is an agreed award. The award should also state the date when the award was made and the seat of the arbitration. Unless an alternative process is agreed by the parties, the award should be notified to the parties by service on them of copies of the award without delay after the award is made (Section 55).
Applicable procedural law for recourse against an award
Applicable legislation governing recourse against an award
2 Are there provisions governing modification, clarification or correction of an award?
The parties are free to agree on the powers of the tribunal to correct an award or make an additional award (Section 57(1)). Unless agreed otherwise, the tribunal has the power (on its own initiative or on an application by one of the parties to the arbitration) to correct an award so as to remove any clerical mistake or error arising from an accidental slip or omission, or to clarify or remove any ambiguity in the award (Section 57(3)(a)). The tribunal is also empowered to make an additional award in respect of any claim (including a claim for interest or costs) that was presented by the parties but not addressed in the award (Section 57(3)(b)). In all cases, the tribunal must first afford the other parties a reasonable opportunity to make further representations.
An application to the tribunal for correction or clarification of the award or for an additional award must be made within 28 days of the date of the original award (Section 57(4)). Any correction of an award must be made within 28 days of the date the application was received by the tribunal or within 28 days of the award if the correction is made by the tribunal on its own initiative (Section 57(5)). Additional awards must be issued within 56 days of the award (Section 57(6)). These time limits can be extended by agreement of the parties. A party must exhaust any recourse available from the tribunal to correct the award or issue an additional award under Section 57 of the Act before seeking to appeal or challenge the award before the courts (see question 3).
Appeals from an award
3 May an award be appealed to or set aside by the courts? If so, on what grounds and what procedures? What are the differences between appeals and applications for set-aside?
An award may be challenged before the English courts on the grounds of lack of substantive jurisdiction (Section 67) or serious irregularity (Section 68). These provisions are mandatory and cannot be excluded by agreement of the parties.
An award may also be appealed to the courts on a question of English law under Section 69 of the Act, unless the parties have excluded this right of appeal (e.g., through selection of institutional rules such as the LCIA Rules containing a waiver of appeal rights).
Lack of substantive jurisdiction
A challenge to an award under Section 67 of the Act can be pursued after the tribunal has issued its jurisdictional award or otherwise following issuance of the tribunal’s final award. ‘Substantive jurisdiction’ is defined in the Act by reference to whether (1) there is a valid arbitration agreement, (2) the tribunal is properly constituted, and (3) the matters submitted to arbitration are in accordance with the arbitration agreement (Sections 82 and 30(1)). An in-time application under Section 67 involves a full rehearing (see Dallah Real Estate and Tourism Holding Company v. The Ministry of Religious Affairs, Government of Pakistan  UKSC 46 at Paragraph 26). The court has the power to confirm, vary or set aside the award in whole or in part (Section 67(3)).
A party may lose its right to challenge an award before the English courts for lack of substantive jurisdiction if the jurisdictional objection has not been raised before the tribunal in accordance with the time frames provided in Section 31 of the Act, unless the challenging party can show that at the time it took part in the arbitral proceedings, it did not know, and could not with reasonable diligence, have discovered the grounds for the jurisdictional objection (Section 73).
An award can also be challenged before the courts for serious irregularity affecting the tribunal, the proceedings or the award under Section 68 of the Act. As defined in Section 68, ‘serious irregularity’ means one or more of the following types of irregularity (this is an exhaustive list) that has caused ‘substantial injustice’ to the applicant:
- failure by the tribunal to comply with the general duties set out in Section 33 of the Act, which are:
- to act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting its case and dealing with that of its opponent; and
- to adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined;
- the tribunal exceeding its powers (other than by exceeding its substantive jurisdiction);
- failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the parties or to deal with all the issues that were put to it;
- the relevant arbitral institution exceeding its powers;
- uncertainty or ambiguity as to the effect of the award;
- the award being obtained by fraud or the way in which it was procured being contrary to public policy;
- failure to comply with requirements as to the form of the award; and
- any irregularity in the conduct of the proceedings, or in the award, that is admitted by the tribunal or relevant arbitral institution.
If a serious irregularity is made out, then the court has the power to remit all or part of the award to the tribunal for reconsideration, or to set aside the award or to declare the award to be of no effect, in whole or in part (Section 68(3)). If the award is remitted to the tribunal, the tribunal must issue a fresh award in respect of the relevant matters within three months of the court’s order or within any alternative time frame ordered by the court (Section 71(3)). As with Section 67, the right to challenge an award based on serious irregularity may be lost if the objection has not been raised in a timely manner with the tribunal (Section 73(1)).
Appeal on a question of law
Section 69 of the Act provides parties with a right of appeal to the English courts on a question of law arising out of the award, unless (as noted above) the parties have agreed to exclude this right. Absent the agreement of all parties, an appeal on a question of law can only be made with the permission of the court. Leave to appeal will only be granted if (1) the determination of the question of law will substantially affect the rights of one or more of the parties and is one that the tribunal was asked to determine; (2) on the basis of the findings of fact in the award, the decision of the tribunal on the relevant question of law (a) is obviously wrong or (b) concerns a question of general public importance and is at least open to serious doubt; and (3) it is just and proper in all the circumstances for the court to determine the question, notwithstanding the parties’ agreement to arbitrate the dispute (Section 69(3)). On an appeal under Section 69, the court has the power to confirm, vary, set aside or remit the award to the tribunal for reconsideration, in whole or in part (Section 69(7)).
As noted in question 2, a party should exhaust any available recourse or appeal rights before the tribunal before pursuing a challenge or appeal before the courts (Section 70(2) of the Act).
Any challenge or appeal must be filed within 28 days of the date of the award or within 28 days of the parties being notified of the outcome of any arbitral appeal, review or correction to the award or an additional award (Section 70(3)). These time limits may be extended by the court.
To commence a challenge or appeal against an award, an applicant must file an arbitration claim form complying with the requirements of Rule 62.4 of the Civil Procedure Rules (CPRs). If the appeal is on a question of law, the arbitration claim form must also identify the relevant question of law and grounds for seeking leave to appeal, and append the award and a skeleton argument that complies with the requirements of Practice Direction (PD) 62.12.2. Written evidence may only be filed in support of an appeal in the limited circumstances set out in PD 62.12.4. An application under Sections 67, 68 or 69 of the Act should be made on notice to the other parties and the tribunal. The court’s usual case management powers will apply, including the power to make an order for summary dismissal.
Applicable procedural law for recognition and enforcement of arbitral awards
Applicable legislation for recognition and enforcement
4 What is the applicable procedural law for recognition and enforcement of an arbitral award in your jurisdiction? Is your jurisdiction party to treaties facilitating recognition and enforcement of arbitral awards?
The United Kingdom has ratified the New York Convention, its predecessor the Geneva Convention, and the Washington (ICSID) Convention.
The Act governs the recognition and enforcement of arbitral awards in England, Wales and Northern Ireland.
Section 66(1) of the Act provides that an award made by a tribunal pursuant to an arbitration agreement may, by leave of the court, be enforced in the same manner as a judgment or order of the court to the same effect. If leave is so given, judgment may be entered in the terms of the award (Section 66(2)). Section 66 of the Act is mandatory and applies to arbitrations seated both inside and outside England and Wales or Northern Ireland (Schedule 1 and Section 2(2)(b) of the Act).
Part III of the Act contains provisions for the recognition and enforcement of foreign awards. Section 101(1) provides that a New York Convention award made outside the United Kingdom shall be recognised as binding on the persons between whom it was made, and may be relied on by those persons by way of defence, set-off or otherwise in any legal proceedings. Pursuant to Section 101(2) of the Act, a New York Convention award may, by leave of the court, be enforced in the same manner as a judgment or order of the court to the same effect. If leave is so given, judgment may be entered in the terms of the award (Section 101(3)).
Pursuant to Section 99 of the Act, Part II of the Arbitration Act 1950, which deals with enforcement, applies to Geneva Convention awards that are not New York Convention awards. Foreign awards that are neither New York Convention nor Geneva Convention awards may be capable of enforcement under legislation applicable to the registration of foreign judgments if the award has become enforceable in the same manner as a judgment in the place where it was made.
Matters of English court procedure are governed by the CPRs, particularly Part 62 (Arbitration Claims). The registration and enforcement of ICSID awards is governed by a separate regime set out in the Arbitration (International Investment Disputes) Act 1966 Act and CPR 62.21, which implements the Washington Convention.
It is also possible to enforce an arbitral award in England at common law by bringing an ‘action on the award’ (i.e., a claim for non-performance of the award).
Since the Act provides no separate procedure for seeking ‘recognition’ of an award (other than by way of defence or set-off), the responses to questions 6 to 18 describe the procedure for seeking leave to enforce an award under Sections 66 and 101 of the Act.
The New York Convention
5 Is the state a party to the 1958 New York Convention? If yes, what is the date of entry into force of the Convention? Was there any reservation made under Article I(3) of the Convention?
The New York Convention entered into force in the United Kingdom on 23 December 1975. A reciprocity reservation is in effect.
6 Which court has jurisdiction over an application for recognition and enforcement of arbitral awards?
An application for leave to enforce an award may be made to the High Court of England and Wales (EWHC) or any county court. In practice, the application should usually be made to the High Court (Commercial Court Registry).
7 What are the requirements for the court to have jurisdiction over an application for recognition and enforcement of arbitral awards? Must the applicant identify assets within the jurisdiction of the court that will be the subject of enforcement for the purpose of recognition proceedings?
The English courts are bound to recognise and enforce foreign awards under the New York Convention unless one of the grounds for refusing recognition and enforcement in Section 103 of the Act is made out. The court’s permission is required to serve the claim form on a defendant out of the jurisdiction (see question 20) but the presence of assets within the jurisdiction is not a precondition for granting leave to enforce (Rosseel NV v. Oriental Commercial & Shipping Co (UK) Ltd  2 Lloyds Rep 625).
Where an arbitration is seated in England and Wales or Northern Ireland, the English courts have supervisory jurisdiction over the arbitration and may grant interim measures in support of enforcement of the award, even when there are no assets in the jurisdiction and enforcement will take place abroad (see question 23).
Form of the recognition proceedings
8 Are the recognition proceedings in your jurisdiction adversarial or ex parte?
An application for leave to enforce an award under either Section 66(1) or Section 101(2) of the Act may be made ex parte in an arbitration claim form (CPR 62.18(1)). The court may direct the arbitration claim form to be served, in which case the claim form should be validly served on the defendant, or defendants, and the enforcement proceedings will then continue as adversarial proceedings (see CPR 62.18(2) and 62.18(3)). If the court grants leave to enforce the award ex parte, the defendant will be served with the order and will have a period of 14 days (or such longer time as specified by the court) to apply to have the order set aside (CPR 62.18(9)).
Form of application and required documentation
9 What documentation is required to obtain the recognition of an arbitral award?
An application for leave to enforce an award should be made in an arbitration claim form (N8) (CPR 62.18(1)). The arbitration claim form should be supported by an affidavit or witness statement containing the information specified in CPR 62.18(6) and exhibiting originals or copies of the arbitration agreement and the award (CPR 62.18(6)(a)). Originals or duly certified copies of these documents must be submitted if the award is a New York Convention award (Section 102(1)).
The claimant must also submit two copies of a draft court order granting permission to enforce the award to be served on the defendant. The order must contain a statement of the defendant’s right to apply to set aside the order within 14 days (or such longer period as the court directs) and a statement that the award will not be enforced until that period has expired or any application made by the defendant within the time limit has been finally disposed of (CPR 62.18(10)).
If the claimant seeks to enforce an award providing for post-award interest, the claimant must also file a statement of interest containing the information specified in CPR 62.19.
Translation of required documentation
10 If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with an application to obtain recognition of an arbitral award? If yes, in what form must the translation be?
A translation of the arbitration agreement and award certified by an official or sworn translator, or by a diplomatic or consular agent, must be submitted in the case of a New York Convention award (Section 102(2)).
Other practical requirements
11 What are the other practical requirements relating to recognition and enforcement of arbitral awards?
A party seeking leave to enforce an award will need to pay the applicable court fee (currently £66 in the EWHC or £44 in the county court). Additional court fees will be payable when applying for execution against an award debtor’s assets.
A party seeking leave to enforce an award on an ex parte basis is subject to a duty of full and frank disclosure. This means that the court should be informed of all material facts, including any pending set aside proceedings and any potential defences of state immunity.
Failure to give full and frank disclosure may lead to an ex parte order being set aside or to costs sanctions (see e.g., Gold Reserve v. Venezuela  EWHC 153, in which the court upheld an ex parte order granting permission to enforce an ICSID award despite the claimant’s failure to give full and frank disclosure of Venezuela’s state immunity defence but imposed costs sanctions).
Recognition of interim or partial awards
12 Do courts recognise and enforce partial or interim awards?
Whether a partial or interim order, decision or award of an arbitral tribunal is enforceable will depend on whether it is an ‘award’ for the purposes of Section 66 or Section 100(1) of the Act.
A partial award made in England and Wales or Northern Ireland under Section 47 of the Act that finally disposes of some of the issues in dispute will be capable of enforcement as an award under Section 66 since, under Section 58(1) of the Act, such a decision will be final and binding (unless otherwise agreed). In contrast, provisional orders that are subject to further review by the tribunal, or procedural decisions, orders or directions, will not be enforceable as an award. However, they may be enforced by the court under Section 42 of the Act if made as a peremptory order by the tribunal under Section 41 of the Act. The court may order the defaulting party to comply with the tribunal’s peremptory order, thus converting the tribunal’s order into a court order, with all the associated sanctions for non-compliance. When considering the effect of a decision by a tribunal (i.e., whether the decision finally disposes of some of the issues in dispute and is therefore an award, rather than a provisional order for the purposes of enforcement), the courts look at the substance of the tribunal’s decision and not the label (Rotenberg v. Sucafina SA  2 All ER (Comm) 952).
In Svenska Petroleum Exploration AB v. Lithuania (No. 1)  EWHC 9 (Comm), the court recognised a foreign jurisdictional award under Section 103(2) of the Act in response to an application by the defendant to strike out the claimant’s application to recognise a final award under Sections 101 to 103 of the Act. However, obiter statements by the Supreme Court in Dallah Real Estate and Tourism Holding Company v. The Ministry of Religious Affairs, Government of Pakistan  UKSC 46 (at Paragraph 22) suggest that the English courts may refuse to recognise and enforce a foreign award that is not final as to its subject matter.
Grounds for refusing recognition of an award
13 What are the grounds on which an award may be refused recognition? Are the grounds applied by the courts different from the ones provided under Article V of the Convention?
If recognition or enforcement of a foreign award is sought under Section 101 of the Act, the grounds for refusal are the same as in Article V of the New York Convention (which Section 103 of the Act implements).
The English courts adopt a pro-enforcement approach and are reluctant to refuse enforcement on the grounds of public policy (see, e.g., Westacre Investments Inc v. Jugoimport-SPDR Holding Co Ltd  3 WLR 811, in which enforcement was ordered despite public policy considerations relating to alleged illegality). If a tribunal has found that there is no illegality under the governing law of the contract, but there is illegality under English law, public policy will only be engaged if the illegality reflects considerations of international public policy rather than domestic public policy (RBRG Trading (UK) Ltd v. Sinocore International Co Ltd  EWCA Civ 838).
In circumstances where a foreign court has already refused enforcement of the same award, recognition and enforcement may be refused if the foreign court judgment creates an issue estoppel (see Diag Human SE v. Czech Republic  EWHC 1639 (Comm), Yukos Capital Sarl v. OJSC Rosneft Oil Co  EWCA Civ 855).
If an application for leave to enforce an award is made under Section 66 of the Act, the courts must refuse leave to enforce an award if, or to the extent that, the person against whom it is sought to be enforced shows that the tribunal lacked substantive jurisdiction to make the award (see Section 66(3)). However, this is subject to the loss of the right to object stipulated in Section 73. In considering applications for leave to enforce under Section 66, the courts have also recognised discretionary grounds for refusing enforcement, which mirror those under the New York Convention.
Effect of a decision recognising an award
14 What is the effect of a decision recognising an award in your jurisdiction? Is it immediately enforceable? What challenges are available against a decision recognising an arbitral award in your jurisdiction?
If an order for leave to enforce is granted on an ex parte basis, the court’s order must be served on the defendant, who will then have a period of 14 days (or such longer time as the court may specify) to apply to set aside the order on the basis that one of the grounds for refusing enforcement under Article V of the New York Convention applies (see question 13). The order may also be set aside if there has been a failure to make full and frank disclosure. The award must not be enforced until after that period expires or any challenge brought by the defendant within that period is finally determined (CPR 62.18(8), 62.18(9)). Thereafter, judgment may be entered in the terms of the award and the award may be enforced in the same manner as any judgment of the English courts.
Decisions refusing to recognise an award
15 What challenges are available against a decision refusing to recognise an arbitral award in your jurisdiction?
A decision of the EWHC refusing leave to enforce an award (or setting aside an order for permission to enforce an award) may be appealed with the permission of the Court on a point of law.
Stay of recognition or enforcement proceedings pending annulment proceedings
16 Will the courts adjourn the recognition or enforcement proceedings pending the outcome of annulment proceedings at the seat of the arbitration? What trends, if any, are suggested by recent decisions? What are the factors considered by courts to adjourn recognition or enforcement?
The English courts have discretion under Section 103(5) of the Act to adjourn enforcement proceedings pending the conclusion of set aside proceedings at the seat. If permission to enforce the award has already been granted, the court has the power to order a stay of execution.
The approach by the English courts is usually to adjourn enforcement of an award (either with or without payment of security) pending the outcome of the annulment proceedings at the seat. Relevant factors when deciding whether to adjourn will usually include (1) whether the application before the courts at the seat of the arbitration is bona fide and not simply a delaying tactic; (2) whether the application before the courts at the seat of the arbitration has at least a realistic prospect of success; and (3) the extent of the delay occasioned by the adjournment and any resulting prejudice (see IPCO (Nigeria) Limited v. Nigeria National Petroleum Corporation  2 Lloyd’s Reports 326 at Paragraph 15).
In IPCO (Nigeria) Ltd v. Nigerian National Petroleum Corporation  EWCA Civ 1144 and  EWCA Civ 1145, the Court of Appeal ruled for the first time that an arbitral award subject to pending annulment proceedings at the seat of the arbitration that had a reasonable prospect of success could, in principle, be enforced because of exceptional and ‘catastrophic’ delays in the Nigerian court system if the English courts determined that enforcement of the award would not be contrary to English public policy.
17 If the courts adjourn the recognition or enforcement proceedings pending the annulment proceedings, will the defendant to the recognition or enforcement proceedings be ordered to post security? What are the factors considered by courts to order security? Based on recent case law, what are the form and amount of the security to be posted by the party resisting enforcement?
If, under Section 103(5) of the Act, a court adjourns a decision on enforcement of an arbitral award pending annulment proceedings at the seat of the arbitration, it may (but is not required to) order the award debtor to give suitable security on an application by the enforcing party.
When considering whether or not to grant security, the court will look at the strength of the argument for setting aside the award at the seat of the arbitration and the ease or difficulty of enforcing the award if an order for security is refused (Soleh Boneh International Limited v. Government of the Republic of Uganda  2 Lloyd’s Rep 208).
If an adjournment application is brought by an award creditor and resisted by the award debtor, this will be ‘a very important factor militating against an order for security’ (Stati and ors v. Republic of Kazakhstan  EWHC 2542 (Comm), Popplewell J at Paragraphs 6 to 8; Eastern European Engineering Ltd v. Vijay Construction (Proprietary) Ltd  EWHC 797 (Comm), Baker J at Paragraph 24).
The award debtor may be required to give security for part of the award (as in Soleh Boneh) or for the full amount of the award (as in Travis Coal Restructured Holdings LLC v. Essar Global Fund Ltd  EWHC 2510 (Comm), in which the court considered there was no realistic prospect of the foreign annulment proceedings succeeding).
The Supreme Court has confirmed that there is no general power under Section 103 of the Act to order an award debtor to post security if enforcement is resisted but there is no adjournment pending a decision by the courts of the seat (see IPCO (Nigeria) Ltd v. Nigerian National Petroleum Corporation  UKSC 16, in which the court allowed an appeal against the judgment referenced in question 16 on the issue of security).
A similar approach is adopted if permission to enforce an award has already been granted and a party seeks a stay of execution of either an award being enforced in England and Wales or Northern Ireland (see Socadec SA v. Pan Afric Impex Co Ltd  EWHC 2086), or the overseas enforcement of an award made in England and Wales or Northern Ireland (see Apis AS v. Fantazia Kereskedelmi KFT  1 All ER (Comm) 348).
In proceedings for registration of an ICSID award, it is open to the court to grant a stay of execution, including an order for security pursuant to its general powers under CPR 40.8A and CPR 83.7(4) (see, e.g., Micula v. Romania  EWCA Civ 1801, in which the court ordered Romania to post US$150 million security; an appeal to the Supreme Court is pending at the time of writing.)
Recognition or enforcement of an award set aside at the seat
18 Is it possible to obtain the recognition and enforcement of an award that has been fully or partly set aside at the seat of the arbitration? If an award is set aside after the decision recognising the award has been issued, what challenges are available against this decision?
A foreign award set aside at the seat of the arbitration may be recognised and enforced if the judgment setting aside the award is (under English private international law rules relating to the recognition and enforcement of foreign judgments) impeachable for fraud, contrary to natural justice, or otherwise contrary to public policy (see Yukos Capital v. OJSC Rosneft Oil Company  EWHC 2188 and Malicorp v. Government of Egypt  EWHC 361 (Comm)). Although this possibility has been recognised under English law, the English courts have not yet enforced an award set aside by the courts at the seat of the arbitration.
More recently, in Nikolay Viktorovich Maximov v. OJSC ‘Novolipetsky Metallurgichesky Kombinat’  EWHC 1911 (Comm), the EWHC stated that a claimant seeking to enjoin the court to exercise its discretion to enforce a set aside award ‘bears a heavy burden’, and must ‘establish not only that [the] foreign court’s decisions were wrong or manifestly wrong but that they are so perverse as for it to be concluded that they could not have been arrived at in good faith or otherwise than by bias’ (Sir Michael Burton at Paragraph 53).
Service in your jurisdiction
19 What is the applicable procedure for service of extrajudicial and judicial documents to a defendant in your jurisdiction?
The applicable rules for service within the jurisdiction are set out in CPR 6 and CPR 62.
The court may direct that the arbitration claim form should be served on specified parties to the arbitration. Unless ordered otherwise by the court, an arbitration claim form should be served on the defendant within one month of the date of issue (CPR 62.4(2)). Permitted modes of service include first-class post, DX, fax, email and other electronic means of communication (PD 62.1.3). If the arbitration claim form is served by the claimant, he or she must file a certificate of service within seven days of service (PD 62.3.2). An order giving permission to enforce an award must be served on the defendant by delivering a copy to the defendant personally or by sending a copy to the defendant at his or her usual or last known place of residence or business (CPR 62.18(7)).
Service out of your jurisdiction
20 What is the applicable procedure for service of extrajudicial and judicial documents to a defendant out of your jurisdiction?
The applicable rules for obtaining permission for service out of the jurisdiction are set out in CPR 6 and CPR 62 (PD 6B). An arbitration claim form seeking leave to enforce an award may be served out of the jurisdiction with the permission of the court, irrespective of where the award is made, or treated as made (CPR 62.18(4)). Service of the court’s order giving permission to enforce an award out of the jurisdiction does not require the court’s permission (CPR 62.18(8)).
The court may permit service to be effected on a party’s solicitors of record in the arbitration within the jurisdiction in certain circumstances, to avoid the need for service out of the jurisdiction (CPR 6.15(1); PD 62.4(3.1); Kyrgyz Republic v. Finrep GmbH  2 CLC 402, Tomlinson J at Paragraph 29; Joint Stock Asset Management Company ‘Ingosstrakh Investments’ v. BNP Paribas SA  EWCA Civ 644, Stanley Burnton LJ at Paragraph 74).
If the party to be served is a state or state entity, additional service requirements set out at Section 12 of the State Immunity Act 1978 (SIA 1978) and CPR 6.44 may also apply – see question 33.
Identification of assets
21 Are there any databases or publicly available registers allowing the identification of an award debtor’s assets within your jurisdiction?
There are several publicly available registers and databases that can be consulted, including:
- the Insolvency Register – to confirm whether an individual award debtor is bankrupt or subject to any related orders;
- the Land Registry – to confirm ownership details for properties and details of any registered charges;
- the Attachment of Earnings index – to confirm whether an individual award debtor has any other attachment of earnings orders against them;
- Companies House – a search will provide information about a UK company or a UK limited liability partnership, including copies of accounts and details of whether a company is in administration or liquidation;
- the Register of Judgments, Orders and Fines – contains details of county court and EWHC judgments from 6 April 2006 for the payment of money (except for certain exempt judgments);
- the Insolvency and Companies List (ChD) of the Business and Property Courts of England and Wales – the court can confirm whether administrators have been appointed by a company or related applications made to the court;
- the Maritime and Coastguard Agency and the Ships and Lloyd’s Register – contain information regarding ships; and
- the Aircraft Registration Section of the Civil Aviation Authority and the UK Register of Aircraft Mortgages – contain information regarding aircraft and aircraft mortgages.
Information available through judicial proceedings
22 Are there any proceedings allowing for the disclosure of information about an award debtor within your jurisdiction?
Once permission to enforce an award has been granted, the claimant may make an ex parte application under CPR 71 for an order requiring the award debtor (or, if the award debtor is a company, an officer of the company) to attend court to provide information that may facilitate enforcement of the award (e.g., relating to the award debtor’s assets). Failure by an award debtor to comply with this procedure risks sanction from the court.
Availability of interim measures
23 Are interim measures against assets available in your jurisdiction? May award creditors apply such interim measures against assets owned by a sovereign state?
The court has the power to grant interim relief in support of enforcement proceedings. There is some uncertainty in case law about whether the court’s powers to do so derive from Section 44 of the Act (which is the source of the court’s powers to award interim relief in support of arbitration proceedings, whether seated inside or outside England and Wales or Northern Ireland), or from Section 37 of the Senior Courts Act 1981 (which sets out the court’s inherent powers to award interim relief in all court proceedings). See, for example, U&M Mining Zambia Ltd v. Konkola Copper Mines  EWHC 3250 (Comm)).
The most commonly sought interim measure is a freezing order to restrain an award debtor from dissipating assets. Freezing orders are available, in principal, in respect of any type of asset (including, e.g., land, securities and bank accounts) provided the applicant can show a real risk that assets will be dissipated or that the award will go unsatisfied, and that it is just and convenient for the court to make the order.
If an award relates to an arbitration seated in England and Wales or Northern Ireland, the court may grant a worldwide freezing order even if there are no assets within the jurisdiction and enforcement will take place abroad (see U&M Mining Zambia Ltd v. Konkola Copper Mines). If the award relates to an arbitration seated outside England and Wales and Northern Ireland, the court may refuse to exercise its powers to grant such relief if it considers that it is inappropriate to do so.
Exceptionally, it may also be possible to obtain an interim measure against a non-party to the arbitration that holds assets on behalf of the award debtor. Based on the current authorities, the non-party must be within the jurisdiction of the English courts (Cruz City 1 Mauritius Holdings v. Unitech  EWHC 3704 (Comm); DTEK Trading SA v. Sergey Morozov and anor  EWHC 94 (Comm)).
Under Section 13(2)(a) of the SIA 1978, the property of a ‘state’ (as defined in the SIA 1978) will be immune from injunctive relief absent any express waiver of immunity (ETI Euro Telecom International NV v. Republic of Bolivia  EWCA Civ 880).
Procedure for interim measures
24 What is the procedure to apply interim measures against assets in your jurisdiction? Is it a requirement to obtain prior court authorisation before applying interim measures? If yes, are such proceedings ex parte?
An application for interim relief under Section 44 of the Act should be made in accordance with the procedure for arbitration claims set out in CPR 62. The general court rules relating to interim relief, including the requirements that apply for freezing orders, are contained in CPR 25.
As set out in CPR 25, an application for a freezing order may be made ex parte and will require supporting evidence in the form of an affidavit. This will need to provide details of the respondent’s assets and the risk of their dissipation, the amounts to be frozen and an explanation of the respondent’s likely defences. An applicant will usually be required to provide a cross-undertaking for any damage suffered by the respondent as a result of complying with the order.
Interim measures against immovable property
25 What is the procedure for interim measures against immovable property within your jurisdiction?
See questions 23 and 24.
Interim measures against movable property
26 What is the procedure for interim measures against movable property within your jurisdiction?
See questions 23 and 24.
Interim measures against intangible property
27 What is the procedure for interim measures against intangible property within your jurisdiction?
See questions 23 and 24.
28 What is the procedure to attach assets in your jurisdiction? Is it a requirement to obtain prior court authorisation before attaching assets? If yes, are such proceedings ex parte?
Once the court has granted permission to enforce the award in the same manner as a judgment and the time limit for challenging the court’s order has elapsed, an award creditor may seek to avail himself or herself of any of the usual measures available for enforcing a money judgment in England. These measures are listed in PD 70 and include writs or warrants for the control of goods (CPRs 83, 84), third-party debt orders (CPR 72), charging orders (CPR 73), attachment of earnings orders (CPR 89) and the appointment of a receiver (CPR 69). Other potential measures include initiating winding-up or insolvency proceedings. The procedure varies depending on the measure pursued.
Attachment against immovable property
29 What is the procedure for enforcement measures against immovable property within your jurisdiction?
An award creditor may apply for a charging order to obtain a charge over the award debtor’s beneficial interest in land (as well as securities or certain other assets). The procedure is set out in CPR 73 and involves an application (usually ex parte) to court for an interim charging order. The order will be served on the defendant and the court will fix a hearing to consider whether a final charging order should be issued. Once in possession of a final charging order, the award creditor may realise the assets by applying for an order for sale of the property.
Attachment against movable property
30 What is the procedure for enforcement measures against movable property within your jurisdiction?
An award creditor may seek a writ or warrant for control of an award debtor’s goods located within England and Wales or Northern Ireland using the procedures set out in CPRs 83 to 85, Schedule 2 of the Tribunal, Courts and Enforcement Act 2007 and the Taking Control of Goods Regulations 2013. The procedure enables an enforcement officer to seize and sell goods (except to the extent they are exempt) to raise funds to satisfy the award debt.
A writ or warrant of control can be issued, without notice, by the court following production of documents and on payment of a fee (although notice must be provided to the award debtor prior to enforcement). In certain circumstances, the prior permission of the court will be required (see CPR 83.2(3)) and an application to obtain that permission should be made in accordance with the procedure set out in CPR 23.
Attachment against intangible property
31 What is the procedure for enforcement measures against intangible property within your jurisdiction?
In addition to a charging order as described under question 29, an award creditor may apply for a third-party debt order compelling a third party within the jurisdiction that owes money to the award debtor to pay those funds directly to the award creditor (CPR 72.1(1)). Third-party debt orders may be used to obtain funds held in bank accounts within the jurisdiction in the name of the award debtor. The procedure is set out in CPR 72 and involves a two-phase process of obtaining an interim and final third-party debt order from the court.
If the award debtor is an individual, it may also be possible to obtain an order from the County Court Money Claims Centre attaching his or her earnings in accordance with the procedure set out in CPR 89.
Exceptionally, if no other legal methods of execution are available, it may be possible to apply to the court for the appointment of a receiver over an award debtor’s assets to assist in the preservation or gathering of property in accordance with the procedure in CPR 69.
Enforcement against foreign states
32 Are there any rules in your jurisdiction that specifically govern recognition and enforcement of arbitral awards against foreign states?
The SIA 1978 governs the immunity of states and quasi-state bodies (as defined in the SIA 1978) under English law. If a state has agreed in writing to submit a dispute to arbitration, it is not immune from proceedings in the English courts that relate to the arbitration (Section 9(1) of the SIA). This immunity extends to court proceedings relating to the recognition and enforcement of foreign awards (Svenska Petroleum Exploration AB v. Government of Republic of Lithuania and AB Geonafta  EWCA Civ 1529 at Paragraph 117). However, it does not extend to execution measures following recognition and enforcement, for which a separate, explicit waiver of immunity is required – see questions 34 and 35.
A state is not precluded from raising fresh jurisdictional arguments before the English courts that were not raised before the arbitral tribunal for the purposes of asserting immunity from jurisdiction in the context of enforcement proceedings (see PAO Tatneft v. Ukraine  EWHC 1797 (Comm), which concerned a bilateral investment treaty award).
Service of documents to a foreign state
33 What is the applicable procedure for service of extrajudicial and judicial documents to a foreign state?
Section 12(1) of the SIA 1978 requires a writ or other document served for instituting proceedings against a state to be transmitted through the Foreign and Commonwealth Office to the Ministry of Foreign Affairs of the state. Service is deemed to have been effected when the writ or document is received at the Ministry. Section 12(2) provides that any time for entering an appearance shall begin to run two months after the date on which the writ or document is received. However, these provisions do not apply if the state has agreed to the service of a writ or other document in another manner (Section 12(6)). Additional rules on the procedure for serving states are set out in CPR 6.
Immunity from enforcement
34 Are assets belonging to a foreign state immune from enforcement in your jurisdiction? If yes, are there exceptions to such immunity?
Section 13(2) of the SIA 1978 provides that relief may not be given against a state by way of an injunction or order for specific performance or for the recovery of land or other property, and that the property of a state shall not be subject to any process for the enforcement of a judgment or arbitral award or, in an action in rem for its arrest, detention or sale. There are two exceptions to this rule: (1) the state may expressly agree in writing to waive its immunity from execution or injunctive relief (Section 13(3)); or (2) enforcement proceedings (but not injunctive relief) are permitted in respect of property belonging to the state if the relevant property is ‘in use or intended for use for commercial purposes’ (Section 13(4)). The state must have a proprietary interest in the assets in question; property belonging to a state-owned entity (even if subject to state control) will not constitute ‘property of a state’ for the purposes of the SIA 1978 (see Botas Petroleum Pipeline Corporation v. Tepe Insaat Sanayii AS  UKPC 31).
The leading case on the scope of the commercial purposes exception is SerVaas Incorporated v. Rafidain Bank  UKSC 40, in which the Supreme Court considered whether debts owed to Iraq by an insolvent state-controlled bank fell within the commercial purposes exception because they had arisen from commercial transactions. The Supreme Court held that the commercial purposes exception does not take into account the origin or source of the property and, in the absence of any proof that the debts were to be applied for a commercial purpose, the claim failed.
The test thus focuses on the use to which the state’s property is put. For instance, in LR Avionics Technologies Ltd v. Nigeria  EWHC 1761 (Comm), the EWHC discharged a charging order over a state-owned premises leased to a company for the purposes of providing visa and passport services on the grounds that the services provided (although outsourced) were consular in nature and therefore the property was immune from execution.
Waiver of immunity from enforcement
35 Is it possible for a foreign state to waive immunity from enforcement in your jurisdiction? If yes, what are the requirements of such waiver?
Pursuant to Section 13(3) of the SIA 1978, a state may expressly agree in writing to waive immunity from execution. A written agreement by a state to submit a dispute to arbitration will constitute a waiver of immunity from proceedings in the English courts relating to the recognition and enforcement of an award but will not amount to a waiver of immunity from execution. To formulate the broadest possible waiver of immunity from execution, the waiver clause should cover immunity from execution both pre-award and post-award or judgment, extend to the relevant state, not just a particular state entity, and specify the categories of assets in respect of which immunity is being waived.
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