Enforcement in England and Wales of arbitral awards set aside in their country of origin

ABSTRACT

In the decision of Nikolay Viktorovich Maximov v Open Joint Stock Company ‘Novolipetsky Metallurgichesky Kombinat’, the English High Court dismissed the claimant's application to enforce a Russian arbitral award that had been set aside in Russia. The High Court held that in order to refuse recognition of the annulment decision, ‘[t]he decision of the foreign court must be deliberately wrong, not simply wrong by incompetence’. The High Court found that the claimant had failed to discharge this heavy burden, notwithstanding its ‘severe criticism’ of the Russian annulment decision. The case serves as a reminder of the difficulties that a party will face in seeking to enforce an arbitral award in England if it has been set aside in the country of origin.

KEYWORDS:

• Recognition and enforcement
• arbitral award
• set aside
• seat of arbitration
• New York Convention
• ex nihilo nil fit

Notes on contributor

Philip Devenish is an attorney in the London office of Quinn Emanuel Urquhart & Sullivan, LLP.

Notes

1 [2017] EWHC 1911 (Comm) (England and Wales High Court).

2 ibid [71].

3 ibid [2].

4 ibid.

5 ibid [15].

6 ibid.

7 ibid [62].

8 ibid [71].

9 ibid [1]–[4].

10 ibid [3].

11 Russian arbitrazh courts consider commercial disputes, in contradistinction to courts of general jurisdiction that consider criminal and civil cases concerning disputes of a non-commercial (or non-economic) nature.

12 Nikolay Viktorovich Maximov (n 1) [5].

13 ibid [1].

14 ibid [7].

15 ibid [14].

16 ibid [1].

17 ibid [10].

18 ibid.

19 ibid [1].

20 ibid [17].

21 ibid [14].

22 ibid [2]. See also ibid [53]–[54].

23 ibid [12].

24 ibid [15] citing AV Dicey, JHC Morris and LA Collins, The Conflict of Laws (15th edn, Sweet & Maxwell 2017) 14–163; OJSC Bank of Moscow v Chernyakov [2016] EWHC 2583 (Comm); Erste Group Bank AG (London) v JSC (VMZ Red October) [2013] EWHC 2926 (Comm).

25 ibid [15].

26 ibid [23]–[42]. See also [56] (finding that the public policy ground was ‘hopeless, and the Judge must have known it was borderline arguable at best’).

27 ibid [62].

28 ibid [17].

29 ibid [62].

30 ibid [53].

31 ibid [64].

32 ibid.

33 ibid [63].

34 FA Mann, ‘Lex Facit Arbitrum’ in Pieter Sanders (ed), International Arbitration: Liber Amicorum for Martin Domke (Martinus Nijhoff 1967).

35 See eg Indus Mobile Distribution Pvt Ltd v Datawind Innovations Pvt Ltd (2017) 7 SCC 678 [10]–[14].

36 Albert Jan van den Berg, ‘Enforcement of Annulled Awards’ (1998) 9(2) The ICC International Court of Arbitration Bulletin 15, 16.

37 Société PT Putrabali Adyamulia v Société Rena Holding et Société Moguntia Est Epices, Cass Civ 1re 29 June 2007, n^o 05–18.053 (French Cour de Cassation) (‘An international arbitral award, which is not anchored in any national legal order, is a decision of international justice whose validity must be ascertained with regard to the rules applicable in the country where its recognition and enforcement are sought’).

38 Judgment of 6 December 1988, Societe Nationale pour la Recherche, le Transport et la Commercialisation des Hydrocarbures (Sonatrach) v Ford, Bacon & Davis, Inc, XV YB Comm Arb 370 (Brussels Tribunal de Premiere Instance) (1990).

39 Judgment of 20 October 1993, Radenska v Kajo, XXVIa YB Comm Arb 919 (Austrian Oberster Gerichtshof) (1999).

40 Judgment of 25 June 2010, Yukos Capital Sarl v OJSC Rosneft Oil Co, XXXV YB Comm Arb 423 (Dutch Hoge Raad) (2010).

41 Van den Berg (n 36) 15.

42 Jan Paulsson, ‘Enforcing Arbitral Awards Notwithstanding a Local Standard Annulment (LSA)’ (1998) 9(1) The ICC International Court of Arbitration Bulletin 14, 31.

43 Société Hilmarton Ltd v Société Omnium de traitement et de valorisation (OTV), Cass Civ 1re 23 March 1994, n^o 92–15.137 (French Cour de Cassation).

44 Georgios Petrochilos, Procedural Law in International Arbitration (Oxford University Press 2004) 336; Albert Jan van den Berg, ‘When Is an Arbitral Award Nondomestic under the New York Convention of 1958?’ (1985) 6 Pace Law Review 25, 41–42.

45 W Michael Reisman, Systems of Control in International Adjudication and Arbitration (Duke University Press 1992) 114–15.