Whether security should be provided for amount of award being challenged in absence of an application


Section 103 of the Arbitration Act 1996 provides that, where an award is being challenged in the country in which it was made, the court where enforcement is being sought may adjourn a decision on enforcement and "may also on the application of the party claiming recognition or enforcement of the award order the other party to give suitable security".

In Dardana v Yukos Oil [2002], the Court of Appeal held that that section gave the court the jurisdiction to make an order about security of its own motion. In this case, the Court of Appeal said that "It is not wholly clear to us how s 103 (5) was thought to provide jurisdiction to the Court to act of its own motion but, in any event, a court which is asked to adjourn, or continue an adjournment of, enforcement is entitled to impose conditions on the exercise of its discretion to do so: CPR 3.1 (3) (a); and may do so of its own initiative: CPR 3.3. Section 103 (5) cannot be treated as precluding the exercise of that right".