Arbitration: Enforcement of a Dubai Arbitration Award in the High Court (TCC) in England – The Approach of the High Court to Section 103 of the Arbitration Act 1996

Charles Edwards, Barrister and TECBAR reviews the case of Honeywell International Middle East Ltd v Meydan Group Llc [2014] EWHC 1344 (TCC), where the High Court enforced a Dubai Arbitration Award in the sum of approximately £12.6 Million made by a tribunal in an international arbitration under the rules of the Dubai International Arbitration Centre (“DIAC”).  This judgment provides useful guidance on the approach to section 103 of the Arbitration Act 1996 by the English Court. The Claimant in the proceedings was Honeywell International Middle East (“Honeywell”). The Defendant was Meydan Group Llc (“Meydan”).  The parties executed a contract for the supply, installation, testing and commissioning of an ELV System at Meydan Racecourse (“the Contract”).  The Contract between the parties at Clause 20.6 included the following in relation to Arbitration: “Unless settled amicably, any dispute shall be settled by international arbitration.                   Unless otherwise agreed by both Parties:

• The dispute shall be finally settled under the Rules of Commercial Conciliation and Arbitration 1994 of the Dubai International Centre
• the dispute shall be settled by three arbitrators appointed in accordance with these Rules,
• the arbitration shall be conducted in the language for communication defined in Sub-Clause 1.4 [Law and Language], and
• the venue of the arbitration shall be Dubai”

A dispute arose between the parties and the matter was resolved by international arbitration under the rules of the Dubai International Arbitration Centre.  The Claimant was awarded the sum of approximately £12.6 Million against the Defendant in the international arbitration. The Claimant commenced proceedings in the High Court by making a without notice application under section 101(2) of the Arbitration Act 1996 (“the Act”) and CPR 62.18(1)(b) for leave to enforce the Award in the sum of approximately £12.6 Million as a judgment or order of the Court.   The Court gave the Claimant leave to enforce the Award in the same manner as a Judgment or Order of the Court to the same effect.  However the Court ordered that the Order should not be enforced for 21 days after the service of the relevant documents on the Defendant or if the Defendant applied within 21 days to set aside the Order, until after the matter had been finally disposed off. On 19 December 2013, the Court gave directions for a hearing to take place on 27 and 28 February 2014.  The purpose of the hearing was to determine whether Meydan’s application to set aside the Order could be considered summarily as having no prospect of success or whether a final hearing was needed, in which case the Court could give further directions. Section 100(1) of the Act provides that: “…a New York Convention Award means an award made, in pursuance of an arbitration agreement, in the territory of a state (other than the United Kingdom) which is party to the New Convention…”. Section 101(2) of the Act provides that: “…a New York Convention award may, by leave of the court, be enforced in the same manner as a judgment or order of the court to the same effect…”. Section 103 of the Act (Refusal of recognition or enforcement of a New York Convention award) provides that: “(1)  Recognition or enforcement of the award shall not be refused except in the following cases. (2)     Recognition or enforcement of the award may be refused if the person against whom it is            invoked proves-

• that a party to the arbitration agreement was (under the law applicable to him) under some incapacity;
• that the arbitration agreement was not valid under the law to which the parties subjected it or, failing any indication thereon, under the law of the country where the award was made;
• that he was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case;
• that the award deals with a difference not contemplated by or not falling within the submission to arbitration or contains decisions on matters beyond the scope of the submission to arbitration or contains decisions on matters beyond the scope of the submission to arbitration (but see subsection (4));
• that the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, with the law of the country in which the arbitration took place;
• that the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made.

(3)     Recognition or enforcement of the award may also be refused if the award is in respect of a matter which is not capable of settlement by arbitration, or if it would be contrary to public policy to recognise or enforce the award…” The Defendant in the High Court (TCC) proceedings contended amongst other things that:

1. The award was not valid under UAE law because it resulted from a contract procured by bribery.
2. The award was not valid because the Defendant was deprived of the opportunity to nominate an arbitrator and as a result recognition and enforcement should be refused under sections 103(2)(a), (b), (c) and (e) of the Act.
3. The award dealt with a difference not contemplated by or not falling within the terms of the submission to the arbitration and therefore the Tribunal wrongly considered and awarded relief in relation to new claims subsequent to the Request for Arbitration under section 103(2)(d) of the Act.
4. The Court should refuse enforcement of the Award under section 103(2)(f) of the Act, as there are proceedings before the Court of Appeal at the seat of the Arbitration relating to the ratification of the Award and an order for execution of the Award had been suspended because of the continuing proceedings before the Court of Appeal at the seat of the Arbitration and therefore the Award was not binding.
5. The Award had been made in respect of matters which are not capable of settlement by arbitration under the applicable law (section 103(3) of the Act).
6. In accordance with section 103(3) of the Act, the enforcement of the Award would be contrary to the public policy of the United Kingdom as the state in which recognition and enforcement of the Award was sought because the Award relates to a Contract procured by bribery.
7. The effect of the Award combined with a previous interim Award causes it substantial injustice and therefore it would be contrary to public policy to enforce it.

In summary, the Court following consideration of the evidence and submissions dismissed the Defendant’s application to set aside the Court Order which had been granted for leave to enforce the Award in the sum of approximately £12.6 Million, as a judgment or order of the Court to the same effect.  The Court considered that the matter had been finally disposed off and that the Defendant had not raised any ground which had a real prospect of success in relation to the application to set aside the Order by which the Claimant was given leave to enforce the Award, as a judgment or order of the court to the same effect. The Court found amongst other things that:

1. In accordance with section 103(1) of the Act, the Court must order enforcement the Award unless the grounds set out in section 103(2) of the Act are made out.
2. In applying the principles relevant to summary judgment and striking out, the Court needed to assess what is put before it, in particular where a party has not raised a matter which could have been raised before the arbitral tribunal or they have taken inconsistent positions to those they now urge upon the Court, the Court should not lightly accede to a submission that the matter needs to be determined at a trial where the underlying reason is often to cause further delay and costs in the hope that something may turn either to strengthen an existing ground or to establish a new ground.
3. The Defendant did not have a real prospect of successfully contending that the arbitration agreement was not valid so as to amount to a ground for refusing recognition or enforcement of the award under section 103(2)(b).
4. Incapacity under section 103(2)(a) of the Act refers to the parties’ legal capacity to enter into the arbitration agreement and not the difficulties that a party may have had in appointing legal representatives and therefore the difficulties regarding the Defendant’s financial arrangements and its ability to fund legal advice are not matters that go to the issue of whether the Defendant was under an incapacity. The Court formed the view that the Defendant’s point had no real prospect of success in establishing that recognition or enforcement of the award should be refused under section 103(2)(a) of the Act or because the arbitration agreement was not valid under section 103(2)(b) of the Act or that the Defendant was not given proper notice of the appointment of the arbitrator of the proceedings under section 103(2)(c) or that composition of the arbitral tribunal or procedure was not in accordance with the agreement of the parties under section 103(2)(e).
5. There was no real prospect of the Defendant succeeding in its contention that recognition of the award should be refused under section 103(2)(c) or (d) of the Act on the basis that the Defendant was not given proper notice of the arbitration proceedings or was unable to present its case or that the award dealt with a difference not contemplated by or not falling within the terms of the submission to arbitration or that it contained decisions on matters beyond the scope of the submission to arbitration.
6. There was no real prospect of the Defendant succeeding in its contention that recognition of the award should be refused under section 103(2)(f).
7. There was no real prospect of the Defendant successfully establishing that recognition of the award should be refused under section 103(3) on the basis that the Award was in respect of matters which are not arbitrable or on the basis of matters not raised in the arbitration or the individual allegations themselves.
8. In respect of the Defendant’s contention that the Award should not be recognised or enforced either as a matter of public policy under section 103(3) of the Act or on a separate ground of material non-disclosure, the Court was of the view that the Defendant had not established grounds on which it had any real prospect of success that the Court should set aside the Order.

If the facts and matters referred to above are relevant to you or your organisation, then please do not hesitate to contact me in chambers or directly via LinkedIn to see how I can assist you or your organisation. The above is for general information only and to encourage discussion and does not constitute legal advice.  The author does not assume any responsibility for the accuracy of any statements made and appropriate legal advice should be taken and relied upon before taking or omitting to take any action in respect of any specific matter.

Charles Edwin Edwards MSt(Cantab) MSc(Lond) FCInstCES Barrister
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