There have been a number of recent cases considering the jurisdiction of the English courts and the enforcement of foreign arbitration awards. In Dallah Estate & Tourism Holding Co v Ministry of Religious Affairs, Government of Pakistan  EWCA Civ 755 the Court of Appeal considered the application of section 103(2)(b) of the Arbitration Act 1996 ("Act"), under which an English court may refuse to recognise or enforce a New York Convention ("Convention") arbitration award where 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.
Dallah Real Estate and Tourism Holding Company (“Dallah”) and the Ministry of Religious Affairs of the Government of Pakistan ("Government") signed a memorandum of agreement, under which Dallah would acquire land near Mecca, build accommodation for pilgrims and lease it to the Government. The Government established a trust vehicle, with which Dallah entered into an agreement for the project ("Agreement"). The Government was not expressed to be a party to the Agreement and nor did it sign it in any capacity. Any disputes were to be settled by arbitration under ICC rules in Paris and no choice of law was specified. Relations between the parties later broke down and Dallah commenced arbitration proceedings against the Government and was awarded damages for breach of the Agreement.
Dallah then sought to enforce the award in England. The judge hearing the application considered section 103(2)(b) of the Act and held that, since the parties had not agreed the law by which the Agreement to arbitrate should be governed, it was subject to French law as the law of the country where the award was made. The judge considered that, under French law, the Government was not a party to the Agreement and the award should therefore not be enforced.
Dallah appealed against this decision, submitting that in applying section 103(2)(b) of the Act, the judge had failed to have sufficient regard to the "pro-enforcement" philosophy behind the Convention, from which section 103(2)(b) of the Act was derived. It argued that the judge should not have conducted a full trial of the issues of fact and law to which the application gave rise, but should have limited itself to an enquiry more in the nature of a review, accepting any relevant findings of fact and decisions of the tribunal unless they could be shown to be clearly wrong. The Court of Appeal rejected this argument, holding that the Act accurately reflected the Convention and entitled the court to reconsider all relevant evidence on the facts, including foreign law.
For this and certain other reasons, the appeal was rejected.