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:
- 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 : (1) the judgment was given by a foreign court of competent jurisdiction;
- 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.
- 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”.