Whether a New York Convention arbitration  award had become binding and so could be  enforced in England


The claimant sought to enforce a New York Convention  award made in the Czech Republic against the defendant.  The defendant resisted enforcement on the ground that  the award had “not yet become binding on the parties”  (section 103(1)(2)(f) of the Arbitration Act 1996). Eder J held  as follows:

  1. A decision by the Austrian Supreme Court (in separate  enforcement proceedings) that the award is not binding  gave rise to an issue estoppel between the parties, with  the effect that the claimant could not argue otherwise.  The judge rejected the claimant’s argument that in  proceedings to enforce under the New York Convention,  issue estoppel cannot arise from decisions in other  states on enforcement itself. The only conditions which  had to be met were those affirmed by the Court of  Appeal in The Good Challenger [2004]: (1) the judgment  was given by a foreign court of competent jurisdiction; 
  2. the judgment is final and conclusive and on the  merits; (3) there is identity of parties; and (4) there is  identity of subject matter (i.e. the issue decided by the  foreign court was the same as that arising in the English  proceedings). Those conditions were met here. (2) Even if there had been no issue estoppel, the judge  would have found that the award was not binding.  Having reviewed prior caselaw, Eder J concluded that  if an award is subject to “ordinary recourse”, rather  than “extraordinary recourse”, in the courts of its  home jurisdiction, it will not be binding. However,  he said he was “extremely reluctant to provide any  definition of either category” and did not approve the  claimant’s argument that “ordinary recourse” should  mean “a genuine appeal on the merits” (as opposed  to an application to set aside, usually on procedural  irregularity grounds). The judge held that here, the  decision of the Municipal Court of Prague that two  issues should be resolved by a review tribunal meant  that the award was subject to a process of “ordinary  recourse” and so was not binding.
  3. The judge also rejected the claimant’s argument that  it was entitled to an award of interest on the capital  sum awarded by the tribunal. The claimant had argued  that even if an award cannot be enforced in full, such  part of the award in respect of which is there is no  realistic or credible challenge can still be enforced and  entitles the claimant to an award of interest (see IPCO  v Nigerian National Petroleum Corporation (No 2) (Weekly  Updates 17/08 and 41/08)). However, here there was no  pending application in the foreign jurisdiction to set  aside an award. Instead, the award was not binding and so: “In my view, that conclusion is fatal to any question  of partial enforcement. I know of no case in which  the English Court (or indeed any court) has permitted  enforcement of any award in such circumstances  i.e. which it has held is not binding. The fact that a  particular sum may be said to be “indisputable” … does  not, in my view, justify the relief sought”.