Enforcing arbitral awards in England

The applicable statute is the Arbitration Act 1996 (“the 1996 Act”). As for the relevant provisions of the statute, the following should be noted:

1. section (“s.” or “ss.”) 66 of the 1966 Act deals with the general summary procedure for enforcement of awards;
2. 100 – 104 contains provisions relating to New York Convention Awards; and
3. Part II of the Arbitration Act 1950, which continues to apply by virtue of s. 99 of the 1996 Act, contains provisions relating to Geneva Convention Awards that are not New York Convention awards.

The United Kingdom acceded to the New York Convention (“the Convention”) in 1975 and the provisions therein are given full effect by ss. 100 – 104 of the 1996 Act.

On 5 May 1980, the UK made a reciprocity declaration.

A claim to enforce an arbitration award under ss. 66 or 101(2) may be commenced in the High Court or in any county court (see s. 105 of the 1996 Act). The choice of venue depends on internal rules of allocation. In international matters, given the sums at stake, applications are normally made to the High Court.

Proceedings relating to arbitration are commenced by way of an arbitration claim form (form N8), which must comply with the requirements of the appropriate practice direction on arbitration (see, generally, Practice Direction 62, available at www.justice.gov.uk/courts/procedure-rules/civil/rules/part62/pd_part62 (last accessed 7 May 2019).

There are no specific jurisdictional requirements.

A fee of £66 must accompany an application for permission to enforce an arbitration award.

Generally, a successful claimant would expect to recover the costs of the application and the proceedings up to, and including, the making of the order. Costs are a matter of discretion and, in some cases, a successful claimant may recover further costs. An example is provided by Caucedo Investments Inc v Saipem SA (formerly Bouygues Offshore SA) [2013] EWHC 3375 (TCC) where a defendant, who refused to accept service of an order enforcing an arbitration award against it in the UK, was ordered to pay the increased costs of serving out of the jurisdiction.

An application for leave to enforce an award can be made ex parte or on notice. When an application is made ex parte, the court will not permit enforcement until the respondent has been served with the order and has had the opportunity to challenge it.

1. 102(1) of the 1996 Act requires that the party seeking enforcement must provide both the award and the original arbitration agreement or certified copies thereof.

Section 102(2) of the 1996 Act provides that, if the award or agreement is in a foreign language, the applicant must also produce a translation certified by an official or sworn translator or by a diplomatic or consular agent.

There are no such requirements. In fact, a party seeking to enforce an arbitral award may appear as a litigant in person.

Service is dealt with by Part 6 of the Civil Procedure Rules (“CPR”). The CPR makes a distinction between service of the claim form and service of other documents. In terms of serving the claim form within the jurisdiction, CPR r. 6.3 provides that, except where the court orders otherwise, service may be effected by several means, including personal service and service by first class post. According to CPR r. 6.14, service is deemed to be effective on the second business day after the appropriate step – which is specified in CPR r. 7.5 – was taken. For example, where the claim form is posted by first class on the Monday, the deemed date of service is the Wednesday of the same week.

As for service of documents within the jurisdiction, CPR r. 6.20 provides a number of methods of service. The deemed date of service of a document depends on the method of service and, accordingly varies (see CPR r. 6.26). For example, where documents are served by fax, if the transmission of the fax is completed on a business day before 4.30pm, the deemed date of service is the same day (CPR r. 6.26.4).

Service outside of the jurisdiction is a different kettle of fish. CPR r. 62.18(4) provides that the claimant may only serve the claim form out of the jurisdiction with the court’s permission. A court order giving permission to enforce an award may be served out of the jurisdiction without the permission of the court (CPR r. 62.18(8)).

The conventions relating to the service of judicial documents to which the UK is a party are reflected in the CPR. For example, the methods of service provided by the Hague Service Convention are reflected in CPR r. 42(1) and the related procedure can be found in CPR r. 43. Thus, the first question is always whether a convention or treaty applies. Where it does not, CPR rr. 6.42(2) and 6.43 govern the method and procedure for service respectively.

There are no real substantive differences in the procedure for the enforcement of foreign arbitral awards. The only thing to note is that, in the case of the latter, the official authenticated documentation required by s. 102(1) of the 1996 Act.

Whether an award is enforceable depends on whether it is an “award” for the purposes of s. 66 or s. 100 of the 1996 Act . In general, an award will be enforceable where it is final; that is where it determines either an issue or all the issues in the proceedings and is not subject to the further review of the tribunal.

Pursuant to s. 103 of the 1996 Act, an New York Convention Award may only be refused recognition on the same grounds set out in Article V of the Convention.

The pro-enforcement bias of English courts means that the public policy defence is construed narrowly and that they are reluctant to refuse to enforce an award on this ground. The strength of the public policy in favour of sustaining international arbitration awards was made clear in the judgment of Colman J in Westacre Investments Inc. v Jugoimport-SPDR Holding Co. Ltd and others [1999] QB 740. An example of where such a defence has succeeded is Soleimany v Soleimany [1999] QB 785 where an award was refused recognition on the basis that the underlying purpose of the subject of the arbitral proceedings was illegal.

Where enforcement proceedings are contested, a judgment or order of the court in relation to those proceedings takes effect on the day that it is made (CPR r. 40.7). Thus, it is enforceable immediately, unless a stay of execution is granted (see CPR r. 83.7). It should be noted that an appeal does not operate as a stay of execution (CPR r. 52.16).

Where, however, an application has been made ex parte, the respondent has 14 days or, if granted by the court, a longer period, to apply to set aside that order and the award cannot be enforced until either after the end of that period or any application to set aside by the respondent has been finally dealt with (see CPR r. 62.18(9)).

A court’s decision to grant or deny enforcement is subject, in the same way as any other decision of a court in domestic proceedings, to challenge on appeal. No appeal is available as of right, however, and, as a result, permission to appeal must be sought from either the court which made the decision or the court to which the appeal is to be made (see generally Part 52 CPR).

Further, a party can always apply for a stay of execution, which has the effect of suspending the order to enforce, pursuant to CPR r. 83.7. Generally, a stay is granted either where the court is satisfied that there are “special circumstances which render it inexpedient to enforce the judgment or order; or the applicant is unable from any reason to pay the money” (CPR r. 83.7(4)).

See first paragraph of answer to question 18.

In theory, the respondent to an application to enforce an award can rely on set off where the award debtor has a liquidated, ascertainable claim against the award creditor that is due and payable at the commencement of the enforcement action.

Section 103(2) of the 1996 Act preserves the discretion of the English courts to enforce an award that has been set aside (“may”). One leading commentator notes that, where an award has been set aside, “the English court will usually, but not invariably, recognise that order and decline to enforce the award” (David St John Sutton et al. Russell on Arbitration (23^rd Ed., 2015) para. 8-047).

In the circumstances where an award is later set aside or revised after it has already been recognised in England, the decision of the foreign court setting aside the judgment has no affect on the judgment of the English court. However, there are options:

1. In the case where the judgment has not yet been enforced, it will be possible to apply for a stay of execution so that enforcement becomes impossible (see 18 above); and/or
2. It may be possible to appeal against the judgment/order recognising or enforcing the award; and/or
3. It may be possible, in certain circumstances, to commence an action to set aside the judgment.

Section 37 of the Senior Courts Act 1981 is the source of the High Court’s power to grant interim measures in support of enforcement proceedings (on the relationship between s. 37 of the 1981 Act and s. 44 of the 1996 Act see AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2013] UKSC 35, [2013] 1 WLR 1889). Thus, in principle, the whole range of injunctions is available to a potential applicant. In practice, the most popular measure is a freezing injunction. Such an order is granted where there is evidence that the award debtor’s assets would be “dissipated” – i.e. removed from the jurisdiction of the court – if an order were not made.

Section 103(5) of the 1996 Act envisions the ordering of security in favour of the judgment creditor against the judgment debtor. In such cases, the court is likely to have regard, inter alia, to the prima facie strength of the judgment debtor’s grounds for opposing enforcement and the possibility of assets being put beyond the reasonable reach of the claimant. Although not dealt with by the 1996 Act, the judgment debtor can in principle also apply for security against the judgment creditor pursuant to Part 25 of the CPR. However, there appears to be no known case where security has in fact been awarded in favour of a defendant to proceedings seeking to enforce an award under the Convention (see, e.g., Diag Human SE v Czech Republic [2013] EWHC 3190 (Comm), [48] per Burton J).