In this case the court set out useful guidance in respect of a stay of enforcement of a judgment on an arbitration award (as opposed to a stay of enforcement of an arbitration award itself).
In England, section 103(2) of the Arbitration Act states that the recognition or enforcement of a New York Convention award may be refused if the award has not yet become binding, or has been set aside or suspended.
Section 103(5) allows the court to adjourn the decision on the recognition or enforcement of the award where an application for the setting aside or suspension of the award has been made. That section also provides that the Court can order that a party must give suitable security, if a stay is granted.
Continental Transfert Technique Ltd v the Federal Government of Nigeria and others
A previous case (IPCO v NNPC) established three factors relevant to the courts discretion under section 103 of the Act, namely:
- Whether the application challenging the award in the country of origin was brought bona fide and not simply as a delaying tactic.
- Whether the application challenging the award had a real prospect of success.
- The extent of the delay occasioned by an adjournment and any resulting prejudice.
Rule 1(1) of Order 47 Rules of the Supreme Court also states that the court may stay enforcement of any judgment “…if the court is satisfied…that there are special circumstances which render it inexpedient to enforce the judgment or order.”
Because this was a case dealing with setting aside a judgement on an award, rather than setting aside an award, it was held that the Court’s power derived from Rule 1(1) of Order 47, not the Act.
However, it was acknowledged that the Act (and the authorities relating to it) served as useful guidance for the Court in deciding how to exercise its discretion under Rule 1(1).
The court applied all of these factors in the case of Continental Transfert and held that the defendant had not established that its application had a real prospect of success, and the evidence suggested an element of delaying tactics. However, it refused an absolute stay but instead ordered a stay conditional upon the provision of substantial security amounting to £100 million.