Court sets aside notice of discontinuance where party had been seeking to enforce an award

The claimants sought to enforce a NY Convention award in their favour both in the UK and in other jurisdictions. In the proceedings here, the defendant sought to set aside the order granting permission to enforce the award. The court directed that the defendant's claim that the award was obtained by fraud should proceed to trial. In so doing, the court had found that there was prima facie evidence of fraud. The claimants then served a notice of discontinuance and the defendant applied under CPR r38.4 to have the notice of discontinuance set aside.

CPR r.38.4 gives no guidance as to the circumstances when a court will set aside a notice of discontinuance. However, prior caselaw has established that abuse of process is not a necessary or exclusive criterion which has to be satisfied, and the judge in this case re-confirmed that point. Although a party is not required to give an explanation for the discontinuance, the court is entitled to examine what the discontinuance is intended to achieve and the reason for it. The overriding objective will apply and there should be consideration of what is fair to all the parties in the case.

The judge did not accept the two reasons given by the claimants for discontinuing (there was no evidence that litigation funders had "carved out" the English proceedings from the funding arrangements, and the securing of attachment orders in other countries had not triggered the notice of discontinuance). Although the judge was not prepared to go so far as to say the claimants had discontinued because they had no answer to the fraud allegation, he did agree that the notice of discontinuance should be set aside, in part because "In the context of a global multi-jurisdiction enforcement exercise by the [claimants] I respectfully take the view that it will not be without use to the Courts of at least some other countries to have a concluded answer on the question of fraud .. and therefore on the question whether the English Court would enforce the Award". That was so even though England is not the seat of the arbitration: it is, however, a jurisdiction to which all the parties have submitted.