Honeywell International Middle East Ltd v Meydan Group

Application to set aside order enforcing a foreign arbitration award

The defendant applied to set aside an order giving the claimant leave to enforce a Dubai arbitration award. Section 103 of the Arbitration Act 1996 provides a list of grounds which may allow a court to refuse to enforce a New York Convention award. Ramsey J summarised the general principles applicable to section 103: if one of the grounds is made out, the court will normally only enforce if the right to rely on the ground has been lost (e.g. by agreement); the court will only refuse to enforce in a clear case; the court will generally be able to come to a decision without the necessity of holding a full hearing, but will instead apply the test of whether there is a real prospect of successfully establishing a ground; and the court needs to assess what is put before it with a critical eye – in particular, the court will not lightly accede to a submission that a matter which could have been raised before the arbitral tribunal should now be determined at a trial.

The judge found in favour of the claimant and, in doing so, rejected the following submissions made by the defendant:

  1. It was argued that the arbitration should have been governed by the 1994 Rules of the Dubai International Arbitration Centre (“DIAC”), rather than the 2007 DIAC Rules. Ramsey J rejected that argument and applied an earlier decision (Longmore J in China Agribusiness v Balli Trading [1998]) to the effect that “A reference to a particular set of rules which have been superseded is, generally as a matter of construction, a reference to arbitration under the rules of the relevant institution at the time when the arbitration was invoked”. Clear words would be needed to exclude this construction.
  2. The request for arbitration wrongly named “Meydan LLC” and not “Meydan Group LLC” as the respondent to the arbitration. The judge held that this did not matter: “The Request for Arbitration was addressed to Meydan LLC as a party with all the attributes of Meydan Group LLC and this means that the Request for Arbitration would reasonably have and did come to the attention of Meydan Group LLC and did do so by 4 August 2010. Meydan therefore had every opportunity to nominate an arbitrator had it wished to do so.” Nor did it make any difference that the defendant could not use public funds to defend a claim addressed to Meydan LLC: that did not amount to an “incapacity” under section 103(2)(a), which applies where a party to the arbitration agreement was (under the law applicable to him) under some incapacity: “incapacity under Section 103(2)(a) refers to the parties’ legal capacity to enter into the arbitration agreement and not to difficulties that a party may have in appointing legal representatives”.
  3. A further ground under section 103 is where the award is suspended by a competent authority in the country in which it is made. Here, under the DIAC Rules, the award was “final and binding on the parties”. Ramsey J held that there was no requirement for anything to occur in the local courts for the award to be given some further status in terms of its binding nature. Furthermore, the issue of whether the award had become binding was a question for the enforcing court, and proceedings in the local court were of no relevance as to whether the award is binding. In any event, the process currently being followed in the Dubai Courts had not led to the award being “set aside or suspended”. The court’s discretion is not triggered automatically by a challenge brought before the court in the country where the award was made.

COMMENT: This case confirms that the misnaming of a respondent’s name in the request for arbitration, where no confusion has been caused, will not invalidate the request. A similar conclusion was reached in the case of Van Oord ACZ Ltd v The Port of Mostyn [2003], where a respondent’s name was partly misspelt (a “z” being replaced with an “s”). This principle highlights the flexibility of the arbitration procedure in contrast to a claim before the English courts, where a defendant’s name must be stated correctly in the claim form. It also confirms the position that a final and binding foreign award will be enforced unless it has actually been set aside or suspended in the local court, or an application for a stay of enforcement has been made to the English court (see, for example, para 19.56 of Arbitration Law by Professor Merkin).