English law is frequently chosen as the governing law of the contract in international transactions, even though neither party to the agreement is English, and the transaction or project in question has no connection with England. There have been recent suggestions that this prevalence of English law may not, after all, be a good thing but rather a deplorable, yet self-perpetuating state of aﬀairs. In particular, a piece published in Global Arbitration Review on 1 April 2014 (but apparently with serious intent) labelled English contract law ‘literalist’,
‘full of unwelcome surprises’ and ‘backward’. At the heart of such criticism is the notion
that other systems of law have a more enlightened, sophisticated, approach to discovering the true intention of the parties. This author does not agree that English contract law is literalist or formalist – and neither do the English decisions and authorities.
How often is English law chosen? Statistics published by Her Majesty’s Courts and the London Court of International Arbitration (“LCIA”) help shed some light on this question.
The English Commercial Court recorded that, over the period
from 31 March 2012 to 1 April 2013, almost 81% of cases before it involved a foreign party, and around 49% of cases were entirely between foreign parties. In commercial disputes, ‘foreign parties’ usually means companies incorporated outside of England. A very similar picture emerges when looking at arbitration proceedings. London is one of the most popular arbitral venues worldwide. According to the LCIA, around 80% of the arbitrations it administers will involve a foreign party.
Although choice of forum and choice of law do not necessarily
go hand-in-hand, they often do, and they should. English law was applied in the majority of these cases before the High Court or LCIA arbitral tribunals. A survey on practices and trends in international arbitration by Queen Mary University in 2010 suggests 40% of respondents adopted English law most frequently for their contracts.
General factors pointing towards English law
Why is English law popular? What factors point commercial parties in the direction of the law of England and Wales when they pick their governing law?
Choosing a governing law may involve a process of elimination. The governing law of the jurisdiction of any of the parties is perceived to oﬀer them a ‘home advantage’. Rightly or wrongly, the impartiality of the courts or tribunals of that jurisdiction may also be questioned. The governing law of the country with which the project or the transaction has the closest connection may be an unknown quantity. Hence, another system of law may commend itself.
Neutrality is not, in truth, a distinguishing feature of any
particular system of law. It would be surprising if the commercial law of a particular country were to openly favour one party to an agreement over the other as a matter of principle. It might be that for a particular contract, one party would benefit from adopting a particular governing law, because that law might (for example) interpret a clause more widely, or apply a rule, in a way that would benefit the party in question in those particular circumstances. It would be rare to find a party who has spent time assessing whether Law X or Law Y would be better for it, in light of the draft contract it is about to sign. Commercial reality is such that a forensic comparison of the eﬀect of diﬀerent governing laws is hardly ever undertaken. It would amount to little more than crystal ball gazing. ‘Neutrality’ then is a matter of perception, but it is something for which English law has a reputation. One way in which English law might be ‘neutral’ is that it has adopted a straightforward approach to contractual interpretation, starting with the ordinary meaning of the language that the parties used in their written agreement. The
bargain struck between commercial parties is generally upheld, and there is little room for implied terms, doctrines of good faith or notions of deliberate breach or fault-based remedies tilting the balance unexpectedly in favour of one or the other party. With English law, what you see is very often what you get.
English courts and tribunals have a (deserved) reputation for impartiality. While litigating or arbitrating in London is not cheap, justice will usually be done, and it will be seen to be done. One way of testing the neutrality of a system of law is to ask: do courts regularly find against the government? In England, they do.
Flexibility is another factor. English law, as a common law
system, is based on judicial precedent and case law, as well as statute. The English law of contract is very much based on precedent: it is judge-made law. Over the centuries, English law has grown and kept pace with modern business practices and technology. It is therefore able to deal with complicated financial structures and technically complex issues, as in the energy, engineering and construction industries (sectors where English law is often chosen). The prevalence of English law has worked to its advantage. Because more complex contracts are subject to English law, English judges and arbitrators get to resolve more such disputes, and jurisprudence can develop. While decisions on contractual interpretations are limited to the agreement in question, it nonetheless helps to have recourse to a body of law on recurring issues and commentary on the standard forms that often provide the foundation for the parties’ contracts.
Language is also a factor. English is the lingua franca of international commerce and the global financial markets, and that is reflected in contracts. England is a politically stable jurisdiction. London is one of the world’s financial centres, and it oﬀers a strong legal infrastructure, with many experienced commercial and dispute resolution lawyers practising English law.
With these general points in mind, we turn to the principles of contractual interpretation under English law – but, first, a brief comparative study.
Contractual interpretation under civil law
Rather than just extolling the virtues of English law, it is instructive to consider the alternatives. The great divide is between English law as a common law system, and civil law (for example, the laws of France, Germany, Italy and Switzerland). Common law jurisdictions interpret a contract objectively, staying close to the words of the agreement, and will not apply notions of reasonableness or materiality. Civil law, on the other hand, is more subjective and sets out to establish the actual intentions of the parties by looking at all aspects of the transactions and their relationship.
By way of an example, the German Bundesgesetzbuch (“BGB”)
considers that a binding contract comes into existence by virtue of the parties’ expressing their will or common intention. The starting point under German law, as in other civil law systems, is that the
parties have freedom to contract. They exercise that freedom through their declaration of will, which is a holistic concept. Article 133 of the BGB states that, when interpreting or construing the parties’ declaration of will, their real will or intention has to be ‘explored’ (“erforschen”), ‘rather than adhering to the literal meaning of the declaration’. That exploration often goes beyond the four corners of the written agreement.
Civil law has also embraced the doctrine of good faith. Article
157 of the BGB provides further that contracts are to be interpreted as required by ‘good faith’ (“treu und glauben”), taking customary practice into consideration. Construction of contracts under German law also extends to what is called “dispositives Recht”. These are statutory provisions that apply for common forms of contract unless there is a contrary indication in the contract. So the judge looks first for statutory gap-fillers (which you may not know anything about if you were drafting the contract subject to German law), and if there are none, then according to the German Courts, he should determine what the parties would have stated in the contract (had they turned their minds to it), paying due regard to the requirements of good faith and commercial practice (BGHZ 16, 71).
Similarly, Article 1156 of the French Civil Code requires ‘… a
search for the common intention of the contracting parties, rather than stopping at the literal meaning of their words.’ As explained by Lord Hoﬀmann in Chartbrook Ltd v Persimmon Homes Ltd & Ors  UKHL 38, under French law, the intention of the parties is considered to be a question of subjective fact, “uninfluenced by any rules of law”. His Lordship went on to describe diﬀerences between French and English law of contractual interpretation as follows:
“It follows that any evidence of what [the parties] said or did, whether to each other or to third parties, may be relevant to establishing what their intentions actually were. There is in French law a sharp distinction between the ascertainment of their intentions and the application of legal rules which may,
in the interests of fairness to other parties or otherwise, limit
The English law approach to construing written contracts
Against that background, we turn to the key principles of the English law of contractual interpretation, to see whether they are really as anachronistic and rigid as has been suggested.
The late Lord Bingham succinctly summarised how English law
sets out to determine the intention of the parties, objectively, in
BCCI v Ali  1 AC 251:
“To ascertain the intention of the parties the court reads the terms of the contract as a whole, giving the words their natural and ordinary meaning in the context of the agreement, the parties’ relationship and all the relevant facts surrounding the transaction so far as known to the parties. To ascertain the parties’ intentions the court does not of course inquire into the parties’ subjective states of mind but makes an objective judgment on the materials already identified.”
Other than the subjective beliefs of the parties, and evidence of the negotiations leading to the contract, the background to the contract against which the wording is construed (objectively) can include ‘absolutely anything’ that might aﬀect how the language would have been understood by the reasonable person (Investors Compensation Scheme v West Bromwich Building Society  UKHL 28).
It bears emphasising that English law is fundamentally commercial, having absorbed the principles of the lex mercatoria (the law of merchants). To quote another famous passage of English law that appeared in The Antaios  AC 191:
“… if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense …”
The English Courts have long accepted that any judge or arbitrator construing the contract should know, and bear in mind,
the extent to which those intentions are given eﬀect. English
the commercial purpose of the agreement.1
More recently, in
law, on the other hand, mixes up the ascertainment of intention with the rules of law by depersonalising the contracting parties and asking, not what their intentions actually were, but what a reasonable outside observer would have taken them to be.”
French law also applies a principle of good faith. Article 1135 of the French Civil Code states that ‘agreements are binding not only as to what is expressed therein, but also as to all the consequences which equity, usage or statute give to the obligation according to its nature.’ One may therefore draw the conclusion that under French law, the parties will be bound by reference to what they subjectively intended, but in addition, the law may impose further obligations on them by reference to what is fair or customary.
Rainy Sky SA v Kookmin Bank  UKSC 50, the Supreme Court
confirmed that wherever there might be an alternative construction (so where the wording could have more than one meaning or eﬀect), the court has to consider which one “is the more commercially sensible”, and should adopt that interpretation. Lord Clarke made it clear that it was not necessary for one possible meaning to go against business common sense, be extreme, absurd, irrational or even be commercially unreasonable. English law always sets out to find the most commercially reasonable interpretation among the various candidates. He concluded:
“… where a term of a contract is open to more than one interpretation, it is generally appropriate to adopt the interpretation which is most consistent with business common sense.”
In Rainy Sky, Lord Clarke also made express reference to notions of fairness. He approved of statements to the eﬀect that there is “a working assumption” that a fair construction best reflects what reasonable people would have expected. It must be recalled, however, that there is no overriding principle of fairness or reasonableness in English contract law. If the words are clear and can have one meaning only, they will be upheld in the commercial context. Lord Clarke did acknowledge the traditional principle that where the parties have used unambiguous language, it will be applied.
It may be this deference to the contractual wording – if it is clear
– that leads critics to describe the English law approach as literalist. But English law has never been quick to accept that the parties would come to an agreement that strikes an impartial observer as unreasonable. Forty years ago, the House of Lords in L Schuler AG v Wickman Machine Tool Sales Ltd  AC 235 noted that:
“The fact that a particular construction leads to a very unreasonable result must be a relevant consideration. The more unreasonable the result the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they shall make that intention abundantly clear.”
There is a built-in protection against English law being too quick to uphold the contractual wording which, when read literally, would seem unreasonable or be commercial nonsense. English law will tread carefully before giving eﬀect to an unreasonable, unfair or uncommercial construction. Interpreting a contract is an iterative process. English law will take all the possible meanings that a contract might have, and investigate the commercial consequences, before adopting whichever makes the most business common sense.
The ability of English law to correct mistakes by construction
Those who brand English law of contract interpretation as ‘unfailingly literalist’ would appear to be unfamiliar with the long- established doctrine of correcting mistakes, or amending the contractual wording, by construction. Yes, you read right: under English law, it is perfectly possible to read words into the contract that are not there, or take out words that are there, when interpreting the agreement.
It is of course the antithesis of a strict literal approach to
construction to accept that if the contractual wording does not reflect the intention of the parties (as objectively determined by the reasonable man), it can be changed. In ICS v West Bromwich,
Lord Hoﬀmann explained that English law, when interpreting contracts, accepts that people sometimes make mistakes, that they may use the wrong words or that they might express themselves badly. Hence:
“... if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had.”
In Chartbrook v Persimmon, His Lordship returned to this topic, explaining that there was no limit to how much red ink was needed to change the contractual wording to correct a mistake by construction:
“… When the language used in an instrument gives rise to diﬃculties of construction, the process of interpretation does not require one to formulate some alternative form of words which approximates as closely as possible to that of the parties. … The fact that the court might have to express that meaning in language quite diﬀerent from that used by the parties … is no reason for not giving eﬀect to what they appear to have meant. What is clear from these cases is that there is not, so to speak, a limit to the amount of red ink or verbal rearrangement or correction which the court is allowed. All that is required is that it should be clear that something has gone wrong with the language and that it should be clear what a reasonable person would have understood the parties to have meant.”
This rule applies to mistakes in drafting. To give some examples:
A contract that, on its face, referred to amounts “actually paid” was corrected to refer to amounts “actually payable”: the result was that an insurer who was reinsured could claim monies due to him under the reinsurance policy from the reinsurer, even though the insurer had not yet paid his insured (Charter Reinsurance Co Ltd v Fagan  AC 313). Contractual wording may be re-arranged, or transposed and
grammatical mistakes may be overlooked. In ICS v West Bromwich, the House of Lords removed wording from within brackets, changing the eﬀect of the relevant clause.
Other cases show that obvious errors, such as the wrong name
for a party, missing out a currency for payments, or using a standard form meant to apply to cargo insurance for a vessel insurance, will not trouble English law unduly: these mistakes were all corrected. The correct terms were read into the document, and clauses that had nothing to do with the actual subject matter of the contract were disregarded.
Where the contract is badly drafted, perhaps where the parties
are not native English speakers, then English law will be keen to look for a sensible (rather than a strict) reading, and may more readily find mistakes that can be corrected by construction. As Lord Bridge put it in Mitsui Construction Co Ltd v AG of Hong Kong
(1986) BLR 1, 14 in the context of a construction contract:
“But the poorer the quality of the drafting, the less willing any court should be to be driven by semantic niceties to attribute to the parties an improbable and unbusinesslike intention, if the language used, whatever it may lack in precision, is reasonably capable of an interpretation which attributes to the parties an intention to make provision for contingencies inherent in the work contracted for on a sensible and businesslike basis.”
So has English law thrown the contract wording overboard?
Make no mistake, the rules that allow judges and arbitrators to correct the contractual wording by construction are not used as a licence to rewrite the entire agreement. English law readily accepts that the legal eﬀect of a contract, when all interpretation and construction is done, might not reflect what the parties writing the document themselves actually intended. Lord Hoﬀmann made this plain in Attorney-General of Belize v Belize Telecom Ltd  UKPC 10, when discussing how and when terms can be implied into the contract:
“The court has no power to improve upon the instrument which it is called upon to construe, whether it be a contract, a statute or articles of association. It cannot introduce terms to make it fairer or more reasonable. It is concerned only to discover what the instrument means. However, that meaning is not necessarily or always what the authors or parties to the document would have intended. It is the meaning which the instrument would convey to a reasonable person having all the background knowledge which would reasonably be available …”
Instead of the contract being just a part of the evidence of the declaration of will of the parties (as it is under civil law), under English law the contract takes on a life of its own, divorced from and independent of the parties and their subjective intention. For that reason, English law does not admit evidence of the prior negotiations between the parties, because whatever they may have said during negotiations, it is the final contract that matters. But the contract under English law is no Frankenstein’s monster, turning on its creators, despite what (ill-informed?) critics may suggest.
There seems nothing objectionable in the notion that if you sign
a contract that is plainly intended to be legally binding, you should be held to what the document means to any sensible reader. Commercial parties tend to be legally represented, and English counsel can assist with any contract drafting. English law throws the onus of making sure that all important terms are included in the contract on the parties, and treats them as grown-ups. It will only imply a term where this is needed to achieve business eﬃcacy
(so that without it, the contract simply would not work). Implying a term is considered to be an extraordinary and intrusive power, and will only be exercised sparingly. It is not enough that the contract fails to deal with an eventuality for which the parties would have made provision, had they thought about it, it must also be clear what specific solution they both would have wanted to adopt had it occurred to them (see Mediterranean Salvage & Towage Ltd v Seamar Trading & Commerce Inc  EWCA Civ 531).
Adopting the contractual wording, leaving behind any subjective views that may not have been outwardly expressed or agreed, brings certainty. If the parties’ subjective views, or their prior negotiations, were admissible as evidence, it would not at all be surprising if, by the time a dispute has come before a judge or arbitral panel, both parties gave conflicting evidence as to what they wanted the contract to mean, or how they understood the words used. On the other hand, suppose both parties gave apparently honest and truthful evidence that each, subjectively, understood the contractual wording diﬀerently. What is the judge or arbitrator to do? Would the inevitable conclusion be that there was no agreement after all? That, it is suggested, would be entirely unsatisfactory where both parties are commercial organisation that signed a contract. The only hard evidence of what the parties actually agreed on is found in the written contract. Rather than trying to (imperfectly) distil common ground by listening to the subjective accounts from two disputing parties, it is preferable to pay close regard to the document that was agreed to, and what it would mean to a reasonable person.
Don’t forget about rectification
The ultimate tool available to English law where a written contract really does not reflect the agreement of the parties (rather than one party objecting to it after the event) is rectification. Rectification is an equitable remedy that can be used to supplement the contract, or add whole provisions or alter the subject matter of the contract (such as whether a lease extended to a particular part of premises (JIS (1974) Ltd v MCP Investment Nominees 1 Ltd  EWCA Civ 721). Rectification is also available where the parties used words believing them to mean one thing, when in fact they meant something else. In theory, the document can be amended as much as equity requires to give eﬀect to true agreement between the parties, but the greater the amount of corrections that are being requested, the less likely it is that the remedy may be granted (Fairstate Ltd v General Enterprise
& Management Ltd  EWHC 3072 (QB)).
Rectification is available if the following circumstances are established:
A written agreement does not reflect the true agreement of the
parties when they made it.
While the true agreement must not have manifested itself in the form of an enforceable contract (perhaps concluded separately from the ‘wrong’ written agreement), the parties must have
outwardly expressed their true agreement right up until they sign the ‘wrong’ contract.
The parties must have failed to record their true agreement
because of a mistake. That mistake must either be a common one (so both parties labour under the same misapprehension), or the mistake is unilateral - one party mistakenly believes that the contract will reflect the agreement, and the other party knows this but does not mention it.
It must be shown that the contract, once rectified, will actually
reflect the true agreement between the parties. That is no easy task, and requires cogent evidence.
Rectification is not an easy claim to make, but it is one route by which English law can arrive at the true, subjective intention of the parties and give legal eﬀect to what they actually wanted. However, in contrast with civil law, this is a last resort rather than the first port of call, or the object of the exercise of construction. Again, from a practical point of view, that seems appropriate. It means that parties cannot hope to succeed before an English court or arbitral tribunal by saying ‘Forget the written contract, it was all meant to be diﬀerent, let me tell you what I actually wanted!’.
In Woodford Land Ltd v Persimmon Homes Ltd  EWHC 984 (Ch), Henderson J (no doubt very familiar with the tactics of parties who have a bone to pick with the apparent meaning of their contractual wording) noted that:
“… it is almost traditional for the claimant to mount a prior argument based on construction, with the claim for rectification advanced in the alternative. Not only are there commonly perceived tactical advantages in proceeding in this way (it enables evidence of the negotiations, inadmissible on the question of construction, to be placed before the court), but, more importantly, the question of rectification only arises if the contract does not have the meaning contended for by the claimant. If, on its true construction, the contract means what the claimant says it ought to mean, then there is nothing for the court to rectify.”
The learned judge was correct in pointing out that evidence of pre-contractual negotiations does in practice find its way before English Courts or arbitrators. They may well uphold the rule that such evidence is inadmissible, but who can say what conclusions they drew from it privately, and how it influenced their thinking?
The long and short of it is that English law has earned its pre- eminence. Commercial parties do appreciate certainty and rigour, and only the most weaselly lawyers would seek to argue otherwise. We should ignore such creatures – they give the profession a bad name. ¥
Arbitration by Battle
by Robert Blackett
Dispute resolution throws up its fair share of aggression. Ever wanted to punch the opposing party in an arbitration? This article looks at whether English law could ever give eﬀect to an agreement to settle a dispute through violence – and how it did historically.
Residual rights and wrongs
Following the Norman conquest, English law recognised a right to trial by battle in certain disputes. The details are of historical interest only, but suﬃce it to say that some criminal defendants could insist on fighting the person who brought the prosecution, and be treated as acquitted if they won. The underlying rationale for trial by battle was that the ‘correct’ outcome was pre-ordained by God, albeit that He generally favoured whichever litigant was the more athletic, and the better armed and armoured.
A residual right to trial by battle persisted until 1819 in what
were known as “appeals”. These were not appeals in the modern sense. Rather, they were private prosecutions of a defendant who had already been the subject of a public prosecution for, but acquitted of, a crime. In an “appeal of murder”, the deceased’s next
-of-kin would bring the prosecution. The defendant in such a case could sometimes insist that the trial be by way of a fight between him and the prosecuting relative.
Appeals were rare, and the right to trial by battle would rarely apply. The right was not available when the “appeal” was brought by a woman, a minor, someone over 60 or who was blind or had a suﬃcient disability. The right was denied to defendants who had attempted to escape from custody, and in cases where the evidence against the accused was thought to be so strong as to ‘admit of no denial’.
The girl, the gauntlets and a get-out-of-jail-free card
Both private appeals and trial by battle were abolished in 1819 following the notorious case of Ashford v Thornton. A detailed account of the case and its repercussions can be found in Megarry A New Miscellany-at-Law (2005). Briefly, a young woman called Mary Ashford was seen leaving a dance with Abraham Thornton. The next morning she was found drowned in a pit, with some signs of having been the subject of sexual violence. Thornton was prosecuted for her murder but acquitted, to much public outrage.
Mary’s brother, William, brought an appeal of murder against
Thornton. In court, Thornton pleaded not guilty, and invoked the obscure right to trial by battle. He then pulled on a pair of leather gauntlets, and threw a pair to Ashford. The court unanimously held that Thornton was within his rights. Lord Ellenborough said:
“… this is not a case that can admit of no denial or proof to the contrary; under these circumstances, however obnoxious I am myself to the trial by battle, it is the mode of trial which we, in our judicial character, are bound to award. We are delivering the law as it is, and not as we wish it to be, and therefore we must pronounce our judgment, that the battle must take place.”
Ashford declined Thornton’s challenge, and so Thornton was acquitted a second time. Parliament promptly passed an Act (59 Geo III Chapter 46) abolishing both private appeals and trial by battle.
Since Ashford v Thornton, there has been the odd attempt to
invoke the right to trial by battle. In 1985 two defendants who were prosecuted in Scotland for armed robbery tried, unsuccessfully, to argue that the 1819 statute did not apply in Scotland. On 16 December 2002 it was reported in the Telegraph that a 60 year old man had sought to invoke a right to trial by battle with “samurai swords, Ghurka knives or heavy hammers” in respect of a £25 fine he had received for a minor motoring oﬀence. To his disappointment, the DVLA declined.
Peers, pistols and prosecutors
It is necessary to say something about the practice of duelling, as distinct from trial by battle. Trial by battle was a public process, sanctioned by law, which operated to determine the legal rights and obligations of the combatants. A participant, provided they acted within the rules, committed no crime if he injured or killed his opponent.
Duelling was a private practice of pre-arranged fights using
matching weapons (typically pistols or swords) in accordance with agreed-upon rules. Duelling was highly formalised, and principally practised by the nobility. Unlike trial by battle, duelling did not concern legal rights. Rather, it aimed to resolve questions of ‘honour’ and avenge perceived sleights.
Duels never seem to have enjoyed any privileged legal status in
England. In R v Brown  1 AC 212 (discussed further below) Lord Mustill refers to a 17th century authority which held it to be well established that someone who killed another in a duel would be guilty of murder. Lord Templeman refers to an 18th Century authority to the eﬀect that “combatants in a duel cannot give consent to one another to take away life”. Consent was similarly no defence to a charge of ‘maiming’ (i.e. injuring someone so as to deprive them of the use of a part of their body which they needed in order to fight). One reason that the victim’s consent did not make it lawful to maim or kill him in a duel was that, by maiming or killing him, you deprived the King of the services of an able-bodied citizen for the defence of the realm.
Though this was the law, practice diﬀered. Millingen in his History of Duelling (1841) cites several examples of cases where juries acquitted those charged with murder in the course of duels.
Legal reforms aimed at stamping out the practice by extending liability beyond the duellists to include seconds, supporters, onlookers and doctors who attended to treat the injured. The resulting ‘joint enterprise’ doctrine is now to be found in section 8 of the Accessories and Abettors Act 1961 (as amended):
“Whosoever shall aid, abet, counsel, or procure the commission of any indictable oﬀence, whether the same be an oﬀence at common law or by virtue of any Act passed or to be passed, shall be liable to be tried, indicted, and punished as a principal oﬀender.”
If D assists or encourages P to commit a crime, and knows of the essential elements of the oﬀence, D is guilty of the oﬀence in the same way as P. If P and D participate together in one crime, and in the course of it P commits a second crime which D had foreseen P might commit, D is guilty of that second crime in the same way as P. By way of an aside, the joint enterprise doctrine finds an important modern application in prosecuting gang crime. An example is the murder of Sofyen Belamouadden at Victoria Station in 2010 (see Odegbune & Ors. v R.  EWCA Crim 711). The case has some parallels with historical duels over matters of honour, as it was a murder which took place in the course of a pre- arranged encounter arising out of a feud said to have had its origins
in “an incident at a party in relation to a girl”.
By the 1840s, public attitudes to duelling were changing. Something of a watershed was the trial of the Earl of Cardigan in 1841 (the Earl was later to lead the notorious charge of the light brigade a the battle of Balaclava). The Earl, a Lieutenant General, allegedly killed a much more junior army oﬃcer in a duel, declaring, upon his arrest “I have hit my man”. Queen Victoria reportedly said at the time that she hoped the Earl “would get oﬀ easily”. As an Earl, Cardigan was entitled to be tried by a jury of his peers which, at the time, meant all 120 members of the House of Lords. They unanimously acquitted the Earl on the dubious ground that the indictment alleged that he had murdered one “Harvey Garnett Phipps Tucket” but the prosecution had only adduced evidence to show he had killed someone called “Captain Harvey Tucket”, and had given no evidence of the deceased’s middle names. The case caused public outrage, it being suggested that the prosecutor had conspired to allow the Earl this loophole. The Times said of the case that “in England there is one law for the rich and another for the poor”.
Arms, armour and ADR
The right to trial by battle is no longer available in the criminal context, but it is conceivable that some enterprising parties to a suitable civil dispute might try to use trial by battle as a form of alternative dispute resolution, to save themselves the time and expense of a court case. One can imagine feuding neighbours who thought they were physically well matched and wanted an opportunity to vent some of their enmity while also resolving (say)
a boundary dispute without the delay and expense of recourse to the courts.
Under the Arbitration Act 1996 (the “1996 Act”), an “arbitration agreement” is “an agreement to submit to arbitration present or future disputes” (section 6). Provided such agreement is in writing (section 5), it enjoys a special status. Court proceedings brought in respect of a matter which is the subject of an arbitration agreement are required to be stayed (section 9). Subject to certain safeguards, awards rendered pursuant to arbitration agreements can be enforced in the courts (section 66).
Most civil disputes are capable of being determined by
arbitration. There are some disputes (for example, regarding the grant of divorces and the custody of children) which English law does not allow to be referred to arbitration.
The 1996 Act states: “1 General principles.
The provisions of this Part are founded on the following principles, and shall be construed accordingly—
the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense;
the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest;
“6 Definition of arbitration agreement.
In this Part an “arbitration agreement” means an agreement to submit to arbitration present or future disputes (whether they are contractual or not).”
“34 Procedural and evidential matters.
It shall be for the tribunal to decide all procedural and evidential matters, subject to the right of the parties to agree any matter.
“46 Rules applicable to substance of dispute.
The arbitral tribunal shall decide the dispute—
in accordance with the law chosen by the parties as applicable to the substance of the dispute, or
if the parties so agree, in accordance with such other considerations as are agreed by them or determined by the tribunal.”
“52 Form of award.
The parties are free to agree on the form of an award.
If or to the extent that there is no such agreement, the following provisions apply.
(4) The award shall contain the reasons for the award unless
… the parties have agreed to dispense with reasons.” “66 Enforcement of the award.
(1) An award made by the 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.
(3) Leave to enforce an award shall not be given where, 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.”
“68 Challenging the award: serious irregularity.
A party to arbitral proceedings may … apply to the court challenging an award in the proceedings on the ground of serious irregularity aﬀecting the tribunal, the proceedings or the award. ...
Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant—
(g) … the award or the way in which it was procured being contrary to public policy;
We will assume a dispute arises between two parties which is, in principle, capable of being referred to arbitration. The parties define in writing exactly what the “Dispute” between them is, and then agree something like:
“The Dispute shall be resolved by arbitration before a single arbitrator who shall be [identify arbitrator or method of their appointment]. Each Party shall compete with the other in a match (the “Match”) at a time, date and place to be determined by the arbitrator, and solely in accordance with [rules] (the “Rules”). The arbitrator shall act as referee during the Match, shall finally determine the winner of the Match in accordance with those rules and shall issue an award, resolving all the issues in the dispute in favour of the Party who is determined to have won the Match.”
There are, of course, a great many combat sports – boxing, judo, wrestling, mixed martial arts (“MMA”) and fencing to name just a few. Parties could conceivably agree to use the rules from any one
of these, or construct their own rules. For those who wanted an authentic medieval flavour, there are rules for competition using period arms and armour. A recent BBC article with pictures from the “International Medieval Combat Federation World Championships” can be found at http://www.bbc.co.uk/news/ magazine-27715991.
We will assume that our warring neighbours agree to an MMA
match. There is no unified rule set or governing body for MMA. Diﬀerent promotions use slightly diﬀerent rules, though all have common elements. Rather than a roped ring, matches are fought in a matted circular, octagonal or hexagonal cage of plastic-coated chain link fencing with padded posts. Competitors in professional matches typically wear 4oz gloves. The main ways to win are by knock-out or by submission. Unlike a boxer, a competitor is not limited to punching but can also use kicks, knees and elbows and can grapple, applying joint locks and chokes. As an example, the rules used in the UKMMA promotion can be found at: http:// www.fightukmma.co.uk/uk-mma-rules/. Many promotions also feature bouts fought under ‘amateur’ or ‘semi-pro’ rules, which variously exclude some of the more dangerous techniques and/or require competitors to wear larger gloves, and sometimes other protective equipment.
Proxies and public policy
Our warring neighbours agree to resolve their dispute as described and hold their match. One is declared the winner, and the arbitrator issues an award in their favour. The losing party seeks to resist enforcement.
It might be argued that a court should not enforce any agreement to determine parties’ rights and obligations by reference to a proxy measure which does not entail any evaluation of the merits of the underlying dispute (e.g. a coin toss, a race or a chess game). The argument would be that obtaining an award in this way made it “contrary to public policy”, because it somehow ‘cheapened’ or ‘trivialised’ justice and the judicial process, or resulted in awards which were divorced from people’s real rights.
A diﬃculty with such an argument is that English law will enforce
an agreement to pay out a bet on the outcome of a game of chance (see section 355 Gambling Act 2005) and will enforce a unilateral oﬀer to pay the winner of an open contest. In both cases the outcome of the game is recognised as eﬀective to determine the parties’ respective rights and obligations. Consider the following scenario:
A and B are party to a dispute wherein A claims to be entitled to be paid £100 and B denies that claim. A and B agree to refer that dispute to arbitration, with the arbitrator to determine the dispute based solely on his tossing a coin, with B to pay A £100 if the coin comes up heads and A is to give up his claim to £100 if the coin comes up tails. The coin comes up heads. A obtains an arbitration award for £100.
B would have to argue that it was contrary to public policy to
obtain an award in such a way. It is, however, very hard to discern any principled distinction between that scenario and the following, which results in an identical award, which would undoubtedly be enforceable:
A and B enter a contract (bet) whereby B agrees to pay A £100 if
a coin comes up heads and A agrees to pay B £100 if the coin comes up tails. A and B agree that any dispute arising under the contract is to be referred to arbitration. The coin comes up heads but B fails to pay, claiming that the coin came up tails. A brings an arbitration claim, and the arbitrator finds that the coin came up heads. A obtains an arbitration award for £100.
Section 46 of the 1996 Act provides that a tribunal can decide a dispute according to “other considerations” agreed by the parties, besides considerations of law. The 1996 Act does not impose any express requirement that these “other considerations” should, nonetheless, at a minimum, involve an evaluation of the merits of each party’s position and a reasoned decision on the merits of that dispute. On the contrary, section 52 allows parties to agree that the tribunal need give no reasons for its decision.
Public policy is evidently not in favour of having disputes resolved
exclusively by way of formal proceedings and reasoned decisions on the merits. English law readily recognises and gives eﬀect to compromise agreements, and various rules of English court procedure (most notably Part 36 of the Civil Procedure Rules) are aimed at encouraging such compromises. Any time a case settles, it will have been resolved without any third party evaluation of the merits of the dispute, or reasoned decision. Consider:
A and B are party to a dispute wherein A claims to be entitled to
be paid £100 and B denies that claim. A and B enter a contract, agreeing that the dispute is fully and finally settled. The settlement agreement provides that B will pay A £100 if a coin comes up heads.
Again, it is very hard to say why this compromise agreement should be enforceable, where the arbitration agreement having equivalent eﬀect should not. For these reasons, and while there is no direct authority on the point, it seems unlikely that an agreement to have an arbitrator determine a dispute according to a proxy measure is, for that reason alone, liable to be denied enforcement as “contrary to public policy”.
Illegality and intentionally inflicted injury
Returning to our warring neighbours and their agreement for trial by combat, the losing party would have to argue that there is something about arbitration by combat – as distinct from arbitration by way of a coin toss, a race or a chess game – which is contrary to public policy.
The simplest way to argue that arbitration by combat was contrary to public policy would be if it could be shown that, by participating in the “Match”, and trying to win according to the “Rules”, the parties would necessarily be committing a criminal oﬀence.
Historically, trial by combat entailed a fight to the death. Today (as noted above in relation to duelling) anyone of sound mind who participated in a pre-arranged fight with the aim of killing their opponent would undoubtedly be guilty of murder (if they succeeded) or attempted murder (if they failed). In particular:
even if the victim could properly be characterised as having ‘consented’ to (the risk of) their own death, consent is not a defence to murder; the use of reasonable force necessary in self-defence is capable of being a defence to murder, but would not arise in the case of a pre-arranged fight to the death, since the use of force was not necessary (the killer participated through choice).
Parties who agreed to take part in a fight to the death but then
backed out, and anyone who agreed to referee such a fight and to issue an arbitration award according to the outcome, would arguably be guilty of conspiracy to murder.
There can therefore be no doubt that an award rendered
pursuant to an agreement for a fight to the death could be successfully challenged under section 68 of the 1996 Act, on the grounds that the award, or the way that it was obtained, was contrary to public policy.
There are, however, many forms of combat, where the aim is not
to kill one’s opponent. The pre-eminent example is boxing. In R v Brown, Lord Mustill described a boxer’s aims as follows:
“… each boxer tries to hurt the opponent more than he is hurt himself, and aims to end the contest prematurely by inflicting a brain injury serious enough to make the opponent unconscious or temporarily by impairing his central nervous system through a blow to the midriﬀ, or cutting his skin …”
Depending on the injury that resulted, it might be thought that anyone who acted in such a way would be guilty of one or more of the following oﬀences:
Common assault contrary to section 39 of the Criminal Justice
Act 1988. This requires that the defendant intentionally or recklessly cause another to apprehend the immediate infliction of unlawful force, or intentionally or recklessly applies unlawful force to another. There is no requirement that any injury result.
Assault occasioning actual bodily harm, contrary to section 47 of the Oﬀences against the Person Act 1861. This oﬀence is the same as common assault, save that an injury which is more than ‘transient or trifling’ is required. Wounding/inflicting grievous bodily harm, contrary to section 20
of the Oﬀences against the Person Act 1861. These oﬀences variously require that the defendant wound (meaning breaking the continuity of both outer layers of skin), or cause grievous bodily harm (meaning ‘really serious harm’), to another, and that the defendant have either intended or foreseen that the act might cause some harm. Note that one cannot attempt to commit the section 20 oﬀence, since it requires that an injury be caused which was more severe than that which was intended.
Wounding/causing grievous bodily harm with intent, contrary to section 18 of the Oﬀences against the Person Act 1861. This oﬀence requires that D act so as to wound another or cause grievous bodily harm to another, and that D have intended to cause grievous bodily harm. Murder. This oﬀence requires that D cause the death of another, and that D have either intended to cause their death or intended to cause grievous bodily harm. The boxer whose opponent dies will not have intended their death (the intent will have been to render the opponent unconscious) but will arguably have intended grievous bodily harm. Note that a boxer could not commit attempted murder (since that requires an intent to kill).
What is the boxer’s defence to such a charge? It seems well
established that it is not a crime to kill or intentionally severely injure another person in the course of a boxing bout, though the rule is not to be found in any act of Parliament. Rather, it seems to be a rule of common law, or custom.
In 1994, the lawfulness of boxing was discussed by the House of
Lords in Brown, and their Lordships all seem to have assumed that boxing was lawful. Their Lordships comments on the issue are obiter since the case did not actually concern the lawfulness of boxing. Brown was an appeal against convictions for: (i) assaults occasioning actual bodily harm contrary to section 47 of the 1861 Act; and (ii) wounding, contrary to section 20 of the 1861 Act. In Lord Templeman’s words:
“The incidents which led to each conviction occurred in the course of consensual sado-masochistic homosexual encounters”
These incidents are described at some length in the judgment, making it one of the more memorable cases which students of English law will have been required to study. The issue was whether consent was a defence to the charges. It was held, by a majority of 3 to 2 that someone who caused actual or grievous bodily harm or a wound without good reason could not rely on consent as a defence. Sado-masochism was not a good reason.
One of the cases considered by their Lordships was Attorney
General’s Reference (No.6 of 1980)  QB 715. Two youths had fought following an argument. In the leading judgment, Lane CJ said:
“We think that it can be taken as a starting point that it is an essential element of an assault that the act is done contrary to the will and without the consent of the victim; and it is doubtless for this reason that the burden lies on the prosecution to negative consent. Ordinarily, then, if the victim consents, the assailant is not guilty. But the cases show that the courts will make an exception to this principle where the public interest requires”
“… it is not in the public interest that people should try to
cause, or should cause, each other actual bodily harm for no good reason ...”
“Nothing which we have said is intended to cast doubt on the accepted legality of properly conducted … sports, ... These apparent exceptions can be justified … as needed in the public interest.”
In Brown, Lord Slynn (in the minority) said of this:
“I am not satisfied that fighting in private is to be treated always and necessarily as so much contrary to the public interest that consent cannot be a defence. In any event I think that the question of consent in regard to a fight needs special consideration. If someone is attacked and fights back he is not to be taken as consenting in any real sense. He fights to defend himself. If two people agree to fight to settle a quarrel the persons fighting may accept the risk of being hurt; they do not consent to serious hurt, on the contrary the whole object of the fight is to avoid being hurt and to hurt the opponent. It seems to me that the notion of "consent" fits ill into the situation where there is a fight. It is also very strange that a fight in private between two youths where one may, at most, get a bloody nose should be unlawful, whereas a boxing match where one heavyweight fighter seeks to knock out his opponent and possibly do him very serious damage should be lawful.”
Lord Templeman (in the majority) said:
“Other activities carried on with consent by or on behalf of the injured person have been accepted as lawful notwithstanding that they involve actual bodily harm or may cause serious bodily harm. Ritual circumcision, tattooing, ear-piercing and violent sports including boxing are lawful activities.”
His Lordship made no attempt to define the precise extent of, or the rationale for, the exception with respect to “violent sports including boxing”.
Lord Mustill (in the minority) spoke of:
“… the failure of any attempt to deduce why professional boxing appears to be immune from prosecution.”
“It is in my judgment best to regard [the apparent immunity of boxing from criminal process] as another special situation which for the time being stands outside the ordinary law of violence because society chooses to tolerate it.”
In Criminal Law: Consent and Oﬀences Against the Person (Consultation Paper)  EWLC C134 the Law Commission described boxing as an “anomaly”:
“… boxing, … is (nearly) unique in making the intentional
infliction of serious injury not only something that is permitted within the rules, but in reality the essence of the sport.”
“The only explanation of injury and death continuing to be caused in boxing with complete impunity, at least as far as the criminal law is concerned, is that the immunity of boxing from the reach of the criminal law is now so firmly embedded in the law that only special legislation can change the position.”
Under the heading “other violent sports” the Law Commission report states:
“It has been pointed out that some forms of martial arts recently introduced into this country, including Thai boxing, kick boxing, and full contact karate, may be equally or more dangerous than (traditional) boxing. Under the present law … serious injuries deliberately inflicted during such contests would appear, in the absence of an express exemption such as is enjoyed by boxing, to be plainly criminal. The legal status of these sports is thus at present controversial, and we would welcome further comment and information about these activities. At the moment we are minded to think that they, like boxing, should be the subject of special consideration by Parliament.”
The only authority cited by the Law Commission as evidence of an “express exemption” for boxing is the obiter passage from the minority judgment of Lord Mustill in R v Brown which has been quoted above. In the twenty years since the Law Commission’s report, neither boxing, nor any other martial art, has received “special consideration by Parliament” save, indirectly, in respect to licensing legislation, which is discussed briefly below.
In 2000, the lawfulness of boxing was touched upon by the Court
of Appeal in the civil case of Watson v British Boxing Board of Control Limited  EWCA Civ 2116. This arose out of a bout in London on 21 September 1991, in accordance with the rules of the British Boxing Board of Control, where Michael Watson fought Chris Eubank for the WBO Super Middleweight title. Watson suﬀered permanent brain damage, and brought a claim against the Board (not Eubank), alleging that the Board had a duty to take reasonable steps to minimise the risks inherent in the sport, specifically that the Board’s rules should have provided for better medical facilities to be available at the ringside. Watson succeeded in his claim.
For our purposes, what is interesting about the case is that, as in Brown, the court and the parties in Watson were prepared to assume (again, obiter) that boxing was lawful, saying:
“Attempts have been made, within Parliament and outside, to bring about the banning of the sport of boxing. They have not succeeded. Boxing could not, however, have survived as a legal sport without strict regulation, one aim of which is to limit the injuries inflicted in the ring. That regulation has been
provided by the Board.”
“Since 1929 the Board has been and continues to be the sole controlling body regulating professional boxing in the United Kingdom. There is no statutory basis for this. The Board's authority is essentially based upon the consent of the boxing world.”
“No one can take part, in any capacity, in professional boxing in this Country who is not licensed by the Board …”
I do not understand the court in Watson to have meant that (professional) boxing is lawful only if performed in accordance with the Board’s Rules, under a license issued by the Board, but not otherwise. If that were the case, it would amount to the imposition of a compulsory licensing regime by the courts, without statute. No such requirement was mentioned either by their Lordships in Brown, or by the Law Commission. A better understanding of Watson is simply as a possible explanation for why boxing has not been made the subject of statutory regulation – it is because, in practice, it is largely already the subject of (adequate) private regulation.
It seems clear that if our feuding neighbours (who are, in any case, amateurs) had agreed to settle their dispute by way of a boxing match and then competed according to those rules, they would not be committing any crime. It will be recalled that our warring neighbours, however, had agreed to an MMA match.
There is no direct authority, but there are reasons for thinking
that MMA is (to use Lord Templeman’s phrase) likely to be one of the “other violent sports” which enjoys the same immunity as boxing.
The Licensing Act 2003 defines certain “licensable activities”, including “the provision of regulated entertainment”. It sets out a regime whereby such activities are required to be authorised by relevant authorities (usually local councils) and section 136 makes it an oﬀence to carry on a licensable activity other than in accordance with such an authorisation. Originally, “licensable activities” were defined as including “a boxing or wrestling entertainment”.
In 2013, the definition was amended to provide that: “a boxing
or wrestling entertainment is any contest exhibition or display of boxing or wrestling or which combines boxing or wrestling with one or more martial arts” (Licensing Act 2003 (Descriptions of Entertainment) Amendment Order 2013). Guidance published by the Departure for Culture Media and Sport at the time (“Deregulating Entertainment Licensing Questions and Answers 2013”) makes clear that this was intended to ensure licensing requirements would extend to “cage fighting and mixed martial arts”.
The Licensing Act 2003 has no direct application to a private
‘arbitration by combat’. A match under our hypothetical arbitration agreement is a private aﬀair, and is not “entertainment”. Note also that section 136 expressly provides
that the person who “boxes or wrestles in a boxing or wrestling entertainment” does not thereby commit an oﬀence under that section – the legislation is aimed at venues and promoters, not competitors.
The amendment is, however, symptomatic of MMA having
become a mainstream sport, in a way that was not the case 20 years ago, at the time of Brown and the Law Commission consultation. Licences are regularly granted for MMA fights which draw large audiences at venues in the UK. Matches are held at town halls and private clubs, but also at high profile venues such as the Wembley and O2 Arenas. In order to enter the UK, competitors and their coaching and support staﬀ from outside the EEA will have been granted either Tier 5 (temporary Worker – Creative and Sporting) or Sports Visitor visas on the basis that they intend to participate in an MMA match. High street bookmakers take bets on these matches, which are regularly broadcast on UK television. Almost every high street newsagent will carry 2 or 3 magazines dedicated to MMA. For good or ill, MMA, like boxing, is undoubtedly a widely tolerated activity, which Parliament has expressly provided can be the subject of licensing by local authorities.
That being the case, it would be surprising if it were to be held
that those who competed in MMA matches, and acted only within the rules, and by extension MMA trainers, promoters, referees, doctors, venue owners, venue staﬀ and audiences, were all guilty of oﬀences. Add to this that it is diﬃcult to draw any principled distinction between MMA and boxing. The only distinction lies in the fact that there is a much better established, de facto private licensing regime for boxing. But if this were a reason for treating boxing as lawful and MMA as unlawful it would, as already noted, amount to imposition of a compulsory licensing regime by the courts, and without statute.
Sports, torts and courts
An entirely separate, issue is that of civil liability. If one neighbour, acting within the rules, kills or injures the other, he may not face any criminal liability, but what if his opponent brings a civil claim to try and recover damages for the injury?
Any such claim would be for the tort of trespass to the person.
This comes in two forms: assault (acts creating a fear in another of immediate unlawful violence) and battery (force causing direct and immediate injury to another). They are “intentional torts” in the sense that the defendant must intend to do that which causes the damage. They are actionable per se, that is, without the need to prove damage.
One defence to a claim in tort is that of volenti non fit injuria (‘to
he who consents there can be no injury’). Is volenti non fit injuria a defence to a deliberate tort of assault or battery?
In Brown, their Lordships had been concerned with the question of whether consent was a defence when the crime resulted in a suﬃciently serious injury. In the civil context, the severity of injury
is not the issue. Volenti is capable of being a defence irrespective of the severity of the harm. See, for example, Geary v JD Wetherspoon  EWHC 1506 (QB) where a woman who fell while sliding down bannisters in a pub and suﬀered a spinal injury resulting in complete tetraplegia failed in her claim for negligence on the ground that she had voluntarily accepted the obvious risk inherent in the drop to the marble floor below.
Blake v Galloway  EWCA Civ 814 concerned an informal
game in which a group of youths threw pieces of bark at each other. One of the participants suﬀered an eye injury, and sought to claim compensation. The defendant argued (successfully) that the claimant had consented to the risk of injury when he chose to participate. The Court of Appeal accepted the following passage from Clerk & Lindsell on Torts (18th Edition) as an accurate statement of the law:
“The claimant cannot claim compensation for the consequences of an act which he has freely invited, or in respect of which he has assumed the risk. The footballer cannot allege that a legitimate tackle is a battery. Thus, when the defendant maintains that the claimant consented to the force used against him, the key question becomes whether that consent extended to the degree or type of force employed against him. The claimant’s consent need not be specific to the alleged act of battery. He may be volenti to the general harm envisaged in a fight or in a sport.”
As such, a competitor in a boxing or MMA match is unlikely to succeed in a claim to compensation for an injury which they sustained as a result of an act of their opponent which was within the rules.
Even where a competitor in a sporting contest does something
which is not in accordance with the rules, there would seem to be a high threshold for liability. Condon v Basi  1 WLR 866 was one of a number of cases arising out of foul tackles in football matches. The court cited, with approval, an Australia decision that:
“the tribunal of fact may think that in the situation in which the plaintiﬀ’s injury was caused a participant might do what the defendant did and still not be acting unreasonably, even though he infringed the ‘rules of the game’”
In other words, a technical breach of the rules is not suﬃcient to establish liability. In Caldwell v Fitzgerald & others  EWCA Civ 1054 (a claim by a jockey unseated as a result of manoeuvres by fellow jockeys) the judge at first instance had said that “in practice it may therefore be diﬃcult to prove any such breach of duty absent proof of conduct that in point of fact amounts to reckless disregard for the fellow contestant’s safety”. On appeal it was said that:
“… there will be no liability for errors of judgment, oversights or lapses of which any participant might be guilty in the context of a fast-moving contest. Something more serious is required.”
In mainstream MMA, there remains the possibility of a claim by an injured competitor against a promoter, as distinct from against a competitor. For example an athlete might claim to have been injured because, in breach of a duty of care, a promoter did not provide adequate ringside medical assistance (as in Watson) or used a cage which was in some way defective, or if a referee failed to intervene to stop a match when a competitor could not defend themselves.
The discussion above has concerned an agreement to ‘arbitrate by combat’ a dispute which has already arisen and been defined. It is necessary to say something briefly about the arbitration of future disputes, which have not yet arisen. Most conventional arbitrations arise under agreements of that kind – an agreement to refer ‘any dispute arising under this contract’ to arbitration.
Such an agreement to refer future disputes to arbitration by combat is very problematic. It is hard to see how one could prevent either Party making a completely spurious claim with no legal merit whatever. Party A might make an entirely unfounded claim to be owed £1 trillion under a low value contract. Party B would deny it (and make an equally spurious £1 trillion counterclaim) but would have to fight A to resolve the issue. Whomever lost would be ruined.
It might be that one could construct some kind of contractual
safeguard to exclude completely spurious, opportunistic claims. For example, one could draft a clause so as to require that a suitable expert determine that there is at least a prima facie case on the merits before it could be referred to arbitration by combat.
Any attempt to use arbitration by combat to resolve disputes in a
business context would also require that careful thought be given to the question of ‘champions’. A company cannot, itself, participate in a fight, and could only do so via an agent. If the aim is to resolve a dispute cheaply and quickly, it would make sense to impose some limit on who could be used as a champion. Would the parties be allowed to use professionals? Would any cap be imposed on how much could be paid to any champion?
If anyone would like to try and resolve a commercial dispute by combat, we will be happy to investigate, think further on these issues, and advise accordingly! ¥
Winning the Battle and Losing the War: Enforcement of Awards Set Aside in the Seat
by Markus Esly
Let’s set the scene. It occasionally happens that:
an arbitration award is made in country A; a judgment is then given in country A which purports to ‘annul’ or ‘set aside’ or ‘vacate’ that arbitral award; and enforcement of the award is then sought in country B. In such a scenario, there are three possibilities: the courts of country B are obligated to recognise the judgment invalidating the award; the courts of country B are obligated to recognise the award; or there is scope for the courts of country B to recognise either the judgment or the award, depending on the circumstances. In any case where these questions arise, they will be questions for the law of country B, and (naturally) much will depend on what (if any) international agreements there are between A and B with respect to the mutual enforcement and recognition of judgments and awards.
The New York Convention
It will often be the case that both A and B will be parties to the New York Convention on the Recognition and Enforcement of Awards. The vast majority of countries are parties.
Article V(1) of the New York Convention provides:
“Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that: …”
It proceeds to list grounds on which enforcement can be refused. For present purposes, the ground which is of interest is (e):
“(e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.”
Other grounds include:
“(c) that the arbitration agreement was not valid under the law to which the parties subjected it or, failing any indication thereon, under the law of the country where the award was
Article VI of the New York Convention Provides:
“If an application for the setting aside or suspension of the award has been made to a competent authority referred to in article V(1)(e), the authority before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.”
Article VII of the New York Convention, provides:
“The provisions of the present Convention shall not … deprive any party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law … of the country where such award is sought to be relied upon.”
The Arbitration Act 1996
The UK is a party to the New York Convention. The provisions from the New York Convention set out above are given eﬀect in England, Wales and Northern Ireland by sections 100, 103 and 104 of the Arbitration Act 1996, which provide:
“100 New York Convention awards.
In this Part a “New York Convention award” means an award made, in pursuance of an arbitration agreement, in the territory of a state (other than the United Kingdom) which is a party to the New York Convention.”
“103 Refusal of recognition or enforcement
Recognition or enforcement of a New York Convention award shall not be refused except in the following cases.
Recognition or enforcement of the award may be refused if the person against whom it is invoked proves –
(b) that the arbitration agreement was not valid under the law to which the parties subjected it or, failing any indication thereon, under the law of the country where the award was made;
(f) that the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made”
“(5) Where an application for the setting aside or suspension of the award has been made to such a competent authority as is mentioned in subsection (2)(f), the court before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the recognition or enforcement of the award.
It may also on the application of the party claiming recognition or enforcement of the award order the other party to give suitable security.”
“104 Saving for other bases of recognition or enforcement. Nothing in the preceding provisions of this Part aﬀects any
right to rely upon or enforce a New York Convention award at
common law or under section 66.”
The word ‘may’ in section 103(2) implies that the court has a discretion whether to enforce an award even if the respondent proves that “the arbitration agreement was not valid” or that the award “has not yet become binding on the parties or has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made”.
Dallah Real Estate and Tourism Holding Co v Ministry of Religious Aﬀairs, Government of Pakistan  1 Lloyd's Law Rep 119
In this case, Dallah sought to enforce in England an award which had been made in its favour against Pakistan. The award was made in Paris.
Pakistan’s case before the arbitrators was that it was not a party to the arbitration agreement. The tribunal held that Pakistan was a party. Pakistan sought to resist enforcement of the award in England on the ground that “the arbitration agreement was not valid … under the law of the country where the award was made” (i.e. French law). At first instance, the English court accepted Pakistan’s argument, and refused to enforce the award. This was upheld by the Court of Appeal and by the House of Lords.
Dallah argued that, even if the arbitration agreement was not
valid under the law of the country where the law was made, the English court still had a discretion to enforce the award anyway.
Lord Mance said:
“In Dardana Ltd v Yukos Oil Company  1 All ER (Comm) 819 I suggested that the word “may” could not have a purely discretionary force and must in this context have been designed to enable the court to consider other circumstances, which might on some recognisable legal principle aﬀect the prima facie right to have enforcement or recognition refused (paras 8 and 18). I also suggested as possible examples of such circumstances another agreement or estoppel.”
Lord Collins said:
“… there is no arbitrary discretion: the use of the word “may” was designed to enable the court to consider other circumstances, which might on some recognisable legal principle aﬀect the prima facie right to have an award set aside arising in the cases listed in section 103(2). … [a] possible example would be where there has been no prejudice to the party resisting enforcement: … But it is not easy to see how that could apply to a case where a party had not acceded to an arbitration agreement.
There may, of course, in theory be cases where the English court would refuse to apply a foreign law which makes the arbitration agreement invalid where the foreign law outrages its sense of justice or decency … for example where it is discriminatory or arbitrary.”
“Only limited assistance can be obtained from those cases in which awards have been enforced abroad (in particular in France and the United States) notwithstanding that they have been set aside (or suspended) in the courts of the seat of arbitration.”
“The power to enforce notwithstanding that the award has been set aside in the country of origin does not, of course, arise in this case.”
In the Court of Appeal, Moore-Bick LJ had said:
“I think it may be necessary to consider on another occasion whether the discretion to permit enforcement may be somewhat broader than has previously been recognised and in particular whether there may be circumstances in which the court would be justified in exercising its discretion in favour of allowing enforcement of a foreign award notwithstanding that it had been set aside by the supervisory court. The question does not arise in this case, however, and I do not think that it would be helpful to do more at this stage than draw attention to the question.”
Dowans Holding SA v Tanzania Electric Supply Co Ltd  2 Lloyd's Rep 275
In this case, Tanzania Electric sought to resist enforcement of a
$65 million award in England on the ground that it was “not yet binding” under section 103(2)(f), because of proceedings seeking to have the award set aside which were pending in Tanzania. Burton J held that the award was “binding”.
“If I had reached the contrary conclusion that, by virtue of the existence of the petition(s) in Tanzania, the ICC Award is not yet binding, I would in any event have had a discretion to
exercise under s103(2). It is not a question of an automatic refusal of recognition or enforcement simply because one of the subsections of s103(2) is satisfied. It is clear from Dallah Real Estate and Tourism Holding Co v Ministry of Religious Aﬀairs, Government of Pakistan (“Dallah”) both in the Court of Appeal ( 1 Lloyd's Law Rep 119 at paragraphs 58-61 per Moore-Bick LJ) and in the Supreme Court  2 Lloyd's Law Rep 691 per Lord Mance at paragraphs 67-68 and 126ﬀ, that, even if an award has been set aside in the home jurisdiction upon one or other of the grounds set out in the subsections, the English courts still retain a discretion to enforce the award, though that jurisdiction will be exercised sparingly. … I have no doubt that if I were to have been persuaded as to the applicability of s103(2)(f), I would have exercised my discretion under s103(2) in the same way as my discretion under s103(5), and indeed exercised both discretions simultaneously, since they would both have resulted from the same factual scenario, namely that there is pending the Defendant's petition in Tanzania. My particular discretion, with regard to security, would, on that analysis, only arise under s103(5), but my discretion as to whether to dismiss, enforce or adjourn under s103(2) would inevitably be exercised in the same way as my discretion to adjourn under s103(5), to which I now turn.”
“It seems to me that where, as here, the Tanzanian court will
… consider the issue of enforcement, by reference to a legal principle (error on the face of the award, but tempered by the Absalom Exception) which would now be a minority approach internationally, but which was, until relatively recently, the approach of this Court, I should be slow indeed to detract from such approach. It would seem diﬃcult to equate this to a genuine Dallah situation, where an award had been set aside upon grounds which a court subsequently asked to enforce the award notwithstanding, would deprecate.”
Burton J granted an adjournment under section 103(5), conditional upon Tanzania Electric providing security in the sum of
Issue estoppel is when an issue has been litigated and decided, in subsequent proceedings a party seeks to re-open that issue, and the court in those subsequent proceedings treats the previous decision on that issue as binding, and does not allow the issue to be re-opened.
In the Diag Human case (discussed below) the court accepted the
following summary of the law (from the judgment of the Court of Appeal in The Good Challenger  1 Lloyd's Reps 67):
“The authorities show that in order to establish an issue estoppel four conditions must be satisfied, namely (1) that the
judgment must be given by a foreign court of competent jurisdiction; (2) that the judgment must be final and conclusive and on the merits; (3) that there must be identity of parties; and (4) that there must be identity of subject matter, which means that the issue decided by the foreign court must be the same as that arising in the English proceedings: see, in particular Carl Zeiss Stiftung v Rayner C Keeler Ltd (No 2)  1 AC 853 (“the Carl Zeiss” case), The
Sennar (No 2)  1 WLR 490” [Clarke LJ @ para 50 of the judgment]
And later, at paragraph 54:
“The authorities establish that there must be “a full contestation and a clear decision” on the issue in question. That is made clear in the speech of Lord Wilberforce in the Carl Zeiss case and (as the judge observed in paragraph 36) was echoed by Lord Brandon in The Sennar (No 2). The cases also underline four further important features of the approach of the courts to issue estoppel, which I will consider in turn. They are as follows:
It is irrelevant that the English court may form the view that the decision of the foreign court was wrong either on the facts or as a matter of English law.
The courts must be cautious before concluding that the foreign court made a clear decision on the relevant issue because the procedures of the court may be diﬀerent and it may not be easy to determine the precise identity of the issues being determined.
The decision of the court must be necessary for its decision.
The application of the principles of issue estoppel is subject to the overriding consideration that it must work justice and not injustice.”
The judge in the Diag Human case also accepted that:
“… special caution is required before a foreign judgment can be held to give rise to an issue estoppel.”
Diag Human Se v Czech Republic  EWHC 1639 (Comm)
Diag was a supplier of blood plasma, retained by the Czech Republic to modernise its blood transfusion system. Various disputes arose, and Diag and the Czech Republic made an ad hoc agreement to refer these to arbitration in the Czech Republic. The parties also agreed:
“The parties have also agreed that the arbitral reward [sic]
will be submitted to a review by other arbitrators whom the parties appoint in the same manner if an application for review has been submitted by the other party within 30 days from the date on which the applicant party received the arbitral award. Articles II-IV of this agreement apply similarly to the review of the arbitral award. If the review application of the other party has not been submitted within the deadline, the award will enter into eﬀect and the parties voluntarily undertake to implement it within the deadline to be determined by the arbitrators, in default of which it may be implemented by the competent court.”
A tribunal was constituted and issued an award, ordering that the Czech Republic pay Diag approximately £135 million in damages and £140 million in interest. Both the Czech Republic and Diag sought to invoke the review process. Diag then purported to withdraw its application for review.
It was Diag’s case that:
the notice served by the Czech Republic was not eﬀective to invoke the review process, because the person who signed it lacked the necessary authority (the “authority point”); and when Diag withdrew its application, the eﬀect was to bring the
review process to an end (the “withdrawal point”); and so
the award had “entered into eﬀect”.
There followed protracted litigation before the Czech courts concerning challenges to the constitution of the review tribunal. In this litigation, the Czech court declined to decide the authority point or the withdrawal point, holding that these fell to be decided by the review tribunal.
Diag sought to enforce the award in various other jurisdictions
including France, Luxembourg, the US and Austria. The Austrian court held that the Award had not yet become “binding” on the parties within the meaning of Article V(1)(e) of the New York Convention.
Diag sought to enforce the award in England. The Czech Republic argued that the award had not yet become “binding” for the purposes of section 103(2)(f) of the Arbitration Act 1996, and that the Austrian decision gave rise to an issue estoppel on that issue.
The court held:
“… there is no doubt, in my view, that the issue actually determined by the Supreme Court was that the Award was not binding. It is true that that decision was reached in the context of enforcement proceedings brought pursuant to the Convention which is, as I understand, in eﬀect directly enforceable in Austria whereas the present enforcement proceedings are brought pursuant to s103 of the 1996 Act. However, in my view, that is a distinction without a diﬀerence given the background to that statutory provision and the fact that its purpose is to give statutory eﬀect in this jurisdiction to the Convention; … In my judgment, that is
suﬃcient to give rise to an issue estoppel to such eﬀect i.e. the Award is not binding. … For the avoidance of doubt, any overriding consideration that the application of the principles of issue estoppel must work justice rather than injustice does not, in my view, lead to any diﬀerent consideration.”
The court went on to consider whether, notwithstanding the estoppel, the award had become “binding”. It will be recalled that, in the Tanzania Electric case, the judge had held the award to be “binding”, notwithstanding that a challenge to the award was pending in the seat. The judge in Diag Human summarised the reasoning in Tanzania Electric as follows:
“although Burton J accepted that the ICC award was not binding in its home jurisdiction of Tanzania because of the unresolved petitions, he accepted the submissions on behalf of the claimants that this had no relevance as a matter of English law to the question whether or not the ICC award was binding under s103(2)(f). In reaching that conclusion, he referred at  to the early debate following the Convention as to whether the relevant test as to the award being binding fell to be decided by reference to the local law (of the home jurisdiction) or by reference to the autonomous interpretation of the Convention. In that context, he referred extensively to the views expressed by Professor Van den Berg (“VDB”), who was a strong supporter of the autonomous interpretation as well as other authorities in England and abroad and concluded  that this represented the predominant international view.”
“Of particular importance, in my view, is the conclusion reached by Burton J in  when he states: “As I conclude, the binding eﬀect of an award depends upon whether it is or remains subject to ordinary recourse. Once it is binding, it does not cease to be so as a result of some event in the home jurisdiction; and the absence of such impediment does not make it so.” As I read the Judgment in Dowans, the proceedings before the Tanzanian Court to set aside or to remit the ICC award were, in eﬀect, treated by Burton J as “extraordinary recourse” and it was for that reason that he concluded that such proceedings were irrelevant for the purposes of enforcement as a matter of English law under s103 of the 1996 Act. In my view, the result is that if an award is subject to “ordinary recourse”, it will not be binding.”
“I fully recognise that there may be a problem of definition
i.e. what constitutes “ordinary recourse” as opposed to “extraordinary recourse”; that there may well be a fine line between the two categories; … and that it remains necessary to consider the proper approach as to how the English court should determine whether or not the award is subject to
“ordinary recourse”. But it seems to me that these problems are inherent in the wording of Article V of the Convention and s103(2)(f) of the 1996 Act.”
“In the present case, [counsel for Diag] submitted that the term “ordinary recourse” refers to “a genuine appeal on the merits” …; and that such term is to be contrasted with “extraordinary recourse”, which refers to an application to a court to set aside (also called “annulment” or “vacatur”) usually on procedural irregularity grounds …”
“Whilst recognising the distinction between “ordinary recourse” and “extraordinary recourse”, I am extremely reluctant to provide any definition of either category; and in my view it would be inappropriate to do so particularly because (i) as appears above, those responsible for drafting the Convention appear to have shied away from such exercise; (ii) the parliamentary draughtsman did not provide any definition of “binding” in the 1996 Act; (iii) it seems unnecessary to do so in the circumstances of the present case; and (iv) even if Mr Cox is right that the term “ordinary course” would embrace a “genuine appeal on the merits”, I am not persuaded that the concept of such term should necessarily be defined in such way.”
Despite the court’s unwillingness to provide any definition of “ordinary recourse” and “extraordinary recourse”, the court accepted that the eﬀective invocation of the contractual review process, with its agreed eﬀect of preventing enforcement, was a form of “ordinary recourse”. The question of whether the review process had been properly invoked so as to prevent the award becoming “binding” turned on the authority point, which was itself a question of Czech law. Having considered the Czech law position, the judge concluded:
“… the application for review under Article V of the arbitration agreement was validly triggered on behalf of the Czech Republic by the signature and service of one or more of the four letters dated 22 August 2008; that the Award is therefore the subject of “ordinary recourse” and not binding for that reason.”
French and US cases
There are some cases in which French and US courts have enforced awards which have been set aside by the courts of the seat. It should be noted that Lord Collins in Dallah said that they were of “limited assistance” for that case, but they illustrate the approach in other countries where awards might need to be enforced.
The leading French case is Hilmarton Ltd v OTV, Cour de cassation, 23 March 1994 (1995) 20 Yb Comm Arb 663, in which a Swiss award was enforced in France even though it had been set aside in Switzerland:
“… the award rendered in Switzerland is an international award which is not integrated in the legal system of that State, so that it remains in existence even if set aside …”
The French courts relied, not upon the discretion in Article VI, but upon Article VII of the New York Convention, which provides:
“The provisions of the present Convention shall not … deprive any party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law … of the country where such award is sought to be relied upon.”
The French courts reasoned that the fact of an award having been set aside in the seat, which was a ground for non- enforcement in Article V(1)(e) of the Convention, was not among the grounds on which enforcement could be refused specified in Article 1502 of the French Code of Civil Procedure.
In the 1996 case, Chromalloy Gas Turbine Corporation v Arab Republic of Egypt 939 F.Supp.907 (DDC 1996), the same US District Court granted enforcement of an award which had been given in Egypt (which is party to the New York Convention) and then set aside by an Egyptian court. The Court in Chromalloy reasoned that the word “may” in Article V(1)(e) of the Convention permitted, but did not require, the enforcement of the award to be refused. The US Court declined to give eﬀect to the Egyptian judgment because the Egyptian judicial decision was contrary both to the US public policy (against detailed, substantive review of arbitral awards) and the parties’ arbitration agreement (which had waived any right to such substantive review). An unspoken factor in the court’s decision might also have been that the annulment had been in favour of an Egyptian government entity, against a foreign investor.
Bechtel v DCA
On 20 February 2002, International Bechtel Company Limited (“Bechtel”) obtained an arbitration award for approximately $24.4 million against the Department for Civil Aviation of the Government of Dubai (“DCA”).
DCA failed to pay the award. Bechtel brought a claim in the Dubai Court of First Instance, seeking to enforce the award. DCA applied to the same Dubai court, seeking to have the award overturned.
The Dubai Court of First Instance overturned the award, on the
ground that witnesses in the arbitration had not taken oaths in the form prescribed by Dubai law.
Bechtel appealed the Dubai Court of First Instance’s ruling to the Dubai Court of Cassation.
On 15 May 2004 the Dubai Court of Cassation aﬃrmed the Dubai Court of First Instance’s decision to overturn the award. That was the end of the road in Dubai.
While Bechtel’s appeal was still pending in Dubai, Bechtel petitioned the US District Court (District of Columbia), seeking confirmation of the award. DCA moved to dismiss.
On 5 February 2004 the US District Court ordered that the US proceedings be stayed pending the appeal in Dubai. In its judgment, the US District Court noted that:
“The Dubai court’s invalidation of the arbitral award solely on the ground that witness oaths were not properly administered, where neither party objected to the form of the oaths when given, in the face of a contract provision stating plainly that the award would be final and binding and that there would be no appeal to any court, registers at the hypertechnical fringe of what Americans would call justice.”
DCA renewed its application to dismiss the US proceedings. On 8 March 2005, the US District Court granted that application.
At that time, the UAE was not party to the New York Convention
(the UAE joined the Convention on 13 June 2006).
Since the New York Convention did not apply, Bechtel had been forced to try and bring its claim for enforcement under the Federal Arbitration Act. The US District Court took the view that that Act was concerned with US domestic awards, and applied to foreign awards “only if the parties had agreed that judgment on the award may be entered in a specific United States court” or (possibly) if the arbitration agreement was governed by US law. Neither of these preconditions applied, and so the motion to dismiss was granted. The status of the Dubai judgment and the merits of Bechtel’s claim never fell to be considered by the US court.
Bechtel had also applied for enforcement of the award in the
Paris Court of First Instance. On 21 October 2003, with Bechtel’s appeal in the UAE still pending, the Paris Court of First Instance issued an order enforcing the award against DCA.
Bechtel’s appeal in the UAE failed, and DCA appealed the Paris
Court of First Instance’s decision to the Paris Court of Appeal.
The UAE was not party to the New York Convention. There was a treaty in place between France and the UAE which provided for the mutual enforcement of judgments and awards. DCA argued that this required the recognition and enforcement in France of the Dubai Court of Cassation judgment. DCA also argued that enforcement of the award would be contrary to public policy – which was a ground set out in the French Code of Civil Procedure for refusing to recognise and enforce a foreign arbitral award.
The Paris Court of Appeal rejected DCA’s arguments. A judgment annulling an arbitral award, (unlike an appeal judgment annulling a domestic judgment) was not required to be given recognition under the treaty. Enforcing the award was not
contrary to international public policy:
“... ne peut faire l’objet d’une reconnaissance en France, que les décisions rendues à la suite d’une procédure d’annulation, à l’instar des décisions d’exequatur, ne produisent pas d’eﬀets internationaux car elles ne concernent qu’une souveraineté déterminée sur le territoire où elle s’exerce, aucune appréciation ne pouvant être portée sur ces décisions émises par un juge étranger à l’occasion d’un procès indirect;
“... [the judgment annulling the award] ... cannot be the object of recognition in France; judgments delivered under an annulment proceeding, like execution orders, do not have international eﬀects because they apply only to a defined territorial sovereignty, and no consideration can be given to these judgments by a foreign judge pursuant to an indirect proceeding; ...”
Other US court decisions
While there are subsequent US decisions confirming the reasoning in Chromalloy, these have nonetheless concluded that particular awards, having been annulled in the arbitral seat, were not entitled to recognition. See Baker Marine Ltd. v Chevron Ltd,
191 F.3d 194; Martin I Spier v Calzaturificio Tecnica SpA, 71
F.Supp.2d 279 / 77 F.Supp.2d 405; and also Temorio SA v Electranta SP, 487 F.3d 928.
A summary of the English position
A first issue will always be to ask: has the award “not yet become binding on the parties, or … been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made”. If the answer is ‘yes’, then the second question is whether the court should nonetheless allow the award to be enforced. There would seem to be no English case in which the court has allowed an award to be enforced, notwithstanding that it has “not yet become binding … or been set aside or suspended”.
The issue in Diag Human was whether the award had “not yet
become binding” under the relevant law (Czech law). The Austrian court held that the award had “not yet become binding”. That finding bound the parties in the English action. In similar, future cases, parties will have to consider carefully where to seek enforcement (and what order enforcement claims should be brought in) so as to try and avoid an unfavourable judgment being made in one jurisdiction which then operates to prevent enforcement in England.
Such a concern does not seem to arise, however, when the
objection to enforcement is not that an award is not “binding” but, rather, that it has been “set aside”. It will usually be obvious whether an award has been “set aside”, and there will be no issue
between the parties on that question. All that would be in issue would be the second question – whether the English court should, in its discretion, nonetheless enforce the award in England. The fact that a third country had declined to enforce the award should not give rise to any issue estoppel, such as to prevent the English court from enforcing the award. The issue of how the English court should exercise its discretion would not have been litigated before the foreign court.
There is little guidance as to when the discretion might fall to be exercised so as to allow an award which had been set aside in the seat to be enforced. In Dallah, Lord Collins states that: “the English court would refuse to apply a foreign law which makes the arbitration agreement [and so presumably, by extension, the arbitration award] invalid where the foreign law outrages its sense of justice or decency … for example where it is discriminatory or arbitrary.” In Tanzania Electric, Burton J refers to the fact that the award is to be subject to a review on the merits by the Tanzanian court, applying a test which until recently had also applied in England. He concluded that “It would seem diﬃcult to equate this to a genuine Dallah situation, where an award had been set aside upon grounds which a court subsequently asked to enforce the award notwithstanding, would deprecate”.
A conclusion for these cases, then, is that a New York Convention
award which has been set aside in the seat is likely to be enforced in England when it has been set aside on grounds which are “discriminatory or arbitrary”. This high standard should at least protect against the worst excesses of tendentious courts and dysfunctional curial law. ¥