The Commercial Court refused to set aside an order allowing enforcement of a Russian award under the ICAC rules on grounds that the Notice commencing the arbitration served on an English Respondent, was almost entirely in Russian. The Ekran OAO v Magneco Metrel UK Ltd [2017] EWHC 2208 (Comm) case is of interest as there is little English authority as to what constitutes “proper notice” under the Arbitration Act 1996 and contrasted with the approach in litigation where court rules require translation of notices served out of the jurisdiction.

Background

The Claimant based in Russia contracted with the Respondent to supply materials for the repair of a furnace. Problems arose when the furnace was put back into operation and the Claimant alleged this was because the goods supplied by the Respondent were of poor quality. The Respondent claimed that the problems were caused by the Claimant’s failure to follow proper procedure. The contract was written in Russian with an English translation. The contract provided that it was subject to Russian law and disputes were to be resolved by arbitration at the ICAC at the Russian Chamber of Commerce and Industry in Moscow. The place of the arbitration was Russia and the language of the arbitration Russian.

In December 2015, the Claimant commenced an ICAC arbitration to resolve the dispute. In January 2016, the ICAC wrote to the Respondent enclosing the Claimant’s statement of claim and some 150 supporting documents. The covering letter and its enclosures were almost entirely in Russian without an English translation. The Respondent ignored the notice and took no steps in the arbitration whatsoever and in due course the arbitrators issued an award in the Claimant’s favour.

When the Claimant applied to the English court to enforce the award, the Respondent applied to set aside the enforcement claiming that it did not appreciate the significance of the letters from the ICAC because they were in Russian and, accordingly, it had not received “proper notice” of the arbitral proceedings or the appointment of the tribunal as required by section 103(2)(c) of the Arbitration Act 1996.

Decision

The court found that “in the context of international commerce, the fact that notice of an arbitration is received in England in a language other than English should not in itself affect the validity of the notice.” The court placed particular emphasis on:

  • the fact that the parties had agreed to have disputes resolved by arbitration in Moscow, under Russian law, conducted in Russian;
  • some previous correspondence between the parties had been in Russian; and
  • most importantly, the fact that the heading of the letter of 14 January 2016 stated in English that it came from the ICAC at the Chamber of Commerce and Industry of the Russian Federation and there was no other reason for the ICAC to be writing to the Respondent.

Although the Claimant and the ICAC could have done more to alert the Respondent to the commencement of the arbitration, the court said it was obvious an arbitration had commenced and it would have been a reasonable step for the Respondent to have obtained an English translation of the correspondence.

Comment

The decision shows that the courts are unlikely to be sympathetic to language barriers in international arbitration particularly where the parties have expressly contracted for proceedings to be in another language. This is to be contrasted with the position in litigation where the EU Service Regulation provides that documents served out of jurisdiction in another member state must be translated to a language that the addressee understands. These provisions will have to be reviewed in light of Brexit1 although it is suspected that requirements as to translation will remain unchanged as CPR 6.45 makes similar provision for non-member who are signatories to the Hague Service Convention 1965.