In Kohn v Wagschal and Others  EWHC 3356 (Comm) a dispute arose between three sisters (the applicants) and their brother (the respondent) regarding the division of the assets of their late father, who had died intestate. Being unable to agree on the distribution of the estate, the parties agreed to submit the dispute to the Beth Din (Rabbinical Court of Judaism) for arbitration. Applying Jewish law, under which there is no presumption of advancement, the tribunal found that the late father had failed to make an effective gift of certain assets, previously transferred to the applicants but without their knowledge, because his main intention in transferring these assets was to place them out of reach of his widow and avoid inheritance tax. As such, the assets remained part of his estate and passed to the respondent on his death.
The applicants refused to accept the Award as rendered, leading the parties to attempt to resolve the position by endeavouring to agree an alternative mechanism to give effect to the Award. There then followed a dispute as to whether any such agreement had ever been made, leading the respondent to seek an order that he be allowed to enforce the original Award in the same manner as a judgment of the court; this order was duly granted by Colman J. In response, the sisters applied to court for a ruling that the Award should not be capable of enforcement because; (1) it amounted to an arrangement tainted with illegality; (2) an agreement had been made subsequently which superseded the Award; (3) the arbitrators had wrongly purported to rule on the case as if they had probate jurisdiction, and had purported to determine matters affecting third parties; and (4) the order did not give effect to the full terms of the Award.
Refusing the application, Morrison J held that enforcing the Award did not involve any reliance on illegal activities since there had, at most, been an attempt to defraud the Revenue, which the Award had exposed and put a stop to. Further, the respondent was not seeking to enforce an illegal agreement, but to enforce his rights under section 66 of the Arbitration Act 19961. Secondly, the fact that neither party regarded itself as obliged to implement the terms of the alleged supplemental agreement was evidence that neither considered itself bound by that agreement, it containing proposals to implement the effect of the Award, not binding commitments to replace it. The intention of the parties was clearly that if the "agreement" broke down they would have recourse to the original claims and the Award. Finally, there was no substance in the jurisdiction argument, because the arbitrators had dealt with the matters as the parties had presented their cases to them.
This case demonstrates once again the willingness of High Court judges to ensure that arbitral awards are respected by the parties who voluntarily agreed to the arbitral process leading up to them.