QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice Strand, London, WC2A 2LL |
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B e f o r e :
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Gater Assets Limited |
Claimant |
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- and - |
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Nak Naftogaz Ukrainiy (translated as National Joint Stock Company Naftogaz of Ukraine |
Defendant |
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Mr Colin Edelman QC and Mr Charles Dougherty (instructed by Clyde & Co) for the Respondent/Claimant
Hearing dates: 21 and 22 March 2007
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Crown Copyright ©
Mr Justice Field:
The New York Convention, Article III
Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.
The Arbitration Act 1996
Section 66
(1) An award by the tribunal pursuant to an arbitration agreement may, by leave of the court, be enforced in the same manner as a judgement or order of the court to the same effect.
(2) Where leave is given judgement may be entered in terms of the award.
(3) Leave to enforce an award shall not be given where or to the extent that the person against whom it is sought to be enforced shows that the tribunal lacked substantive jurisdiction to make the award.
The right to raise such an objection may have been lost (see section 73).
(4) Nothing in this section affects the recognition or enforcement of an award under any other enactment or rule of law, in particular …..or the provisions or Part III of this Act relating to the recognition and enforcement of awards under the New York Convention or by an action on the award.
Sections 67, 68 and 69
As is well known, these provisions allow an arbitration party to challenge a domestic award on grounds of a lack of substantial jurisdiction (s. 67) or serious irregularity (s. 68) or on a point of law by way of an appeal to the court (s. 69).
Section 70(1) and (6)
(1) The following provisions apply to an application or appeal under sections 67, 68 or 69.
……..
(6) The court may order the applicant or appellant to provide security for the costs of the application or appeal and may direct that the application or appeal be dismissed if the order is not complied with….
Section 81(1)
(1) Nothing in this part shall be construed as excluding the operation of any rule of law consistent with the provisions of this part, in particular any rule of law as to …
(c) the refusal of recognition or enforcement of an arbitral award on grounds of public policy.
The CPR
CPR 58.3
These rules and their practice directions apply to claims in the commercial list unless this Part or a practice direction provides otherwise.
CPR 62.1(3)
Part 58 (Commercial Court) applies to arbitration claims in the Commercial Court…..except where this Part otherwise provides.
CPR 62.18 (1) and (3)
(1) An application for permission under (a) section 66 of the 1966 Act;
(b) section 101 of the 1996 Act;
……
to enforce an award in the same manner as a judgement or an order may be made without notice in an arbitration claim form.
(3) The parties on whom the arbitration claim form is served must acknowledge service and the enforcement proceedings will continue as if they were an arbitration claim under section 1 of this Part.
My general reasoning also goes to address the proper approach to CPR r 25.12. Both in respect of the practice direction and the rule one is concerned to identify the defendant. It may rightly be said that, insofar as section 103 is concerned, the burden is upon the applicant to make its case, except to the extent that a court might itself take the initiative in a matter of public policy, but I do not think that that is the answer. What the applicant is doing is resisting enforcement. It is true that the consequence of proving the necessary situation may be to create an estoppel between the parties, but the exercise is an essentially defensive one. The end purpose is not to attack the award but to attack its enforcement. In those circumstances I think it right to treat the applicant as the defendant with the consequence that whether the power is to be found hidden in the practice direction or in r.25.12 there is jurisdiction to award security for costs against the holder of the award.
Notwithstanding anything contained herein to the contrary, the amount recoverable hereunder shall not exceed (1) the amounts actually recovered from third parties, plus the total of gross premium, plus accrued interest.