CA-2025-000131 - [2025] EWCA Civ 928

The applicable principles

The supervisory jurisdiction

The starting point is that, as established in C v D [2007] EWCA Civ 1282, [2008] 1 All ER (Comm) 1001, the parties’ agreement to the seat of an arbitration constitutes an agreement as to the “curial law” of the arbitration and is analogous to an exclusive jurisdiction clause in favour of the courts of the jurisdiction of the seat, the “supervisory” jurisdiction. Where that curial law is the law of England and Wales, the parties thereby incorporate the framework of the Arbitration Act 1996 (“the 1996 Act”). This necessarily means that any challenges to the award can be only those permitted by the 1996 Act: see Longmore LJ at [17], where he concluded that “a choice of seat for the arbitration must be a choice of forum for remedies seeking to attack the award”. Sir Anthony Clarke MR and Jacob LJ agreed.

In C v D the defendant, an insurer incorporated in the United States insuring another US registered corporation on the Bermuda Form, argued that as the policy was governed by New York law (but provided for arbitration in London), it was also entitled to challenge the award against it in New York. The Court of Appeal rejected that contention for the reasons set out above and upheld an anti-suit injunction granted by Cooke J against the insurer, Longmore LJ stating at [16] that:

“….it could not be supposed that the aggrieved party could complain in one jurisdiction and the satisfied party be entitled to ask the other jurisdiction to declare its satisfaction with the award. There would be a serious risk of parties rushing to get the first judgment or of conflicting decisions which the parties cannot have contemplated.”

In Atlas Power Ltd and others v National Transmission and Despatch Company Ltd [2018] EWHC 1052 (Comm), [2019] 1 All ER (Comm) 931,NTDCL mounted a similar argument in seeking to challenge an LCIA award in proceedings in Lahore following a London-seated arbitration pursuant to Article 18.3 of a power purchase agreement with different independent power producers (“IPPs”). Article 18.3 in that case was identical to the equivalent provision in the PPA in the present case. The IPPs applied to the Commercial Court for an anti-suit injunction, resisted by NTDCL on the grounds that, although England and Wales was the primary supervisory jurisdiction, the courts of Pakistan had concurrent jurisdiction.

At [38] to [41] I rejected NTDCL’s argument, applying the reasoning in C v D that the parties’ choice of a London seat was analogous to an exclusive jurisdiction clause in favour of the place so designated. I held at [39] that that was the case even if the law of Pakistan was the governing law of the arbitration and such law provided a right to challenge any award [39], following Longmore LJ’s conclusion in relation to the equivalent argument in relation to New York law in C v D at [20] that, even if that contention was correct:

“… it would not qualify as an “agreement to the contrary” in the 1996 Act. Still less would it entitle the defendant to mount a challenge to the award in a country other than the seat of the arbitration.”

Enforcing the exclusivity of the supervisory jurisdiction

It is well established that where court proceedings are brought in breach of an agreement to arbitrate the court will generally grant an anti-suit injunction to prevent any further breach unless there are strong reasons not to do so. That was recently re-affirmed by the Supreme Court in UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30, [2024] 3 WLR 3 659, Lord Leggatt stating at [71] that:

“…if the parties had chosen an English seat of arbitration, the English court would not hesitate to enforce the parties’ bargain by issuing an injunction to restrain a party over whom it has personal jurisdiction from commencing or continuing foreign proceedings in breach of the arbitration agreement. That has been clear at least since the decision of the Court of Appeal in Aggeliki Charis Cia Maritima SA v Pagnan SpA (The Angelic Grace) [1995] 1 Lloyd’s Rep 87, where Millett LJ said, at p 96, that “the time has come to lay aside the ritual incantation that this is a jurisdiction which should only be exercised sparingly and with great caution”. He observed that, while such an approach has much to commend it where an injunction is sought on the ground of forum non conveniens, there is no good reason for diffidence in granting an injunction to restrain foreign proceedings brought in breach of an arbitration agreement “on the clear and simple ground that the defendant has promised not to bring them”. As Millett LJ further explained:

“The justification for the grant of the injunction ... is that without it the [applicant] will be deprived of its contractual rights in a situation in which damages are manifestly an inadequate remedy. The jurisdiction is, of course, discretionary and is not exercised as a matter of course, but good reason needs to be shown why it should not be exercised in any given case.”

This approach has been endorsed and repeatedly followed in later cases, including by this court in Enka Insaat ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38, [2020] 1 WLR 4117 at paras 180-184…”

That approach applies with even more force to court proceedings brought to challenge or invalidate an arbitration award in a foreign jurisdiction when England and Wales is, as the jurisdiction of the seat of the arbitration, the supervisory (and therefore exclusive) jurisdiction for such challenges. In granting the anti-suit injunction in Atlas I cited the following passage from the judgment of Cooke J in C v D [2007] EWHC 1541 (Comm), [2007] 2 Lloyd’s Rep 367, from which the Court of Appeal did not dissent in upholding the anti-suit injunction in that case:

“55…Time and again the English courts have granted an injunction to restrain a clear breach of an exclusive jurisdiction agreement or a breach of an arbitration agreement where the rights of the parties are clear. In my judgment the position is even stronger where an award has already been issued and the breach of the agreement to London arbitration consists of an unlawful attempt to invalidate the award.

It matters not at all whether the US courts would or would not ultimately assume jurisdiction and uphold or vacate the award or whether the US Court in question, under its own conflicts of laws rules, is bound to exercise a supervisory jurisdiction….no questions of comity arise because the mandatory exercise of jurisdiction by a foreign court, in such circumstances, only arises by reason of the breach of contract on the part of the party invoking that jurisdiction. An injunction preventing suit in that court is thus not a breach of international comity preventing a court from exercising what it regards as a mandatory jurisdiction but merely restrains a party to a contract from doing something which it has promised not to do.”

Challenges to an award under the New York Convention

The New York Convention is to be interpreted in accordance with the principles set out in the Vienna Convention on the Law of Treaties 1969 (“the VCLT”), reflecting customary international law.

Giving the terms of the New York Convention their “ordinary meaning…in the light of [the Convention’s] object and purpose” (as required by Article 31(1) of the VCLT), it is clear that the Convention is solely concerned with recognition and enforcement in a secondary jurisdiction (which is a Contracting State) of awards made in the territory of another Contracting State, the latter being the primary jurisdiction. Each of Articles I and III to VII deals solely with the nature and extent of the obligation of the secondary jurisdiction to recognise and enforce such awards (Article II referring to the recognition of written arbitration agreements more generally). The Convention neither imposes any other obligation nor confers any other jurisdiction in respect of foreign arbitral awards. In particular, the various matters set out in Article V(1), which include proving that the underlying arbitration agreement is not valid under its governing law (V(1)(a)) or that the award deals with matters beyond the scope of the arbitration agreement (V(1)(c)), are solely bases on which “[r]ecognition and enforcement of the award may be refused, at the request of the party against whom it is invoked”. It was not suggested that any other matters forming part of the context of the Convention are to be taken into account (under Article 31 of the VCLT) or any supplemental means of interpretation (under Article 32 of the VCLT) affect that plain reading of its text.

It is apparent, therefore, that “challenges” to an award under the New York Convention are a shield against applications for the recognition and/or enforcement of an award, not a sword by which the award may be attacked pre-emptively.

This is reflected in the manner to which the New York Convention is given effect in this jurisdiction under the 1996 Act. Section 101(1) provides that a foreign New York Convention award shall be recognised in England and Wales or Northern Ireland and section 101(2) provides that such an award may, by leave of the court, be enforced in the same manner as a judgment of the court to the same effect.

Section 103(1) provides that recognition or enforcement of a New York Convention award shall not be refused except “in the following cases”. Then section 103(2) follows Article V of the Convention by providing that recognition or enforcement of the award may be refused if the person against whom it is invoked proves one of six defences, reflecting certain of those set out in Article V(1) of the Convention. The remainder of the defences in Article V are covered in further powers to refuse recognition or enforcement in sections 103(3) and (4).

It is not open to question that the defences set out in section 103 are solely available by way of opposition to an application to recognise and/or enforce a New York Convention Award under section 101 of the 1996 Act. Free-standing challenges to an award can only be made under section 67 (substantive jurisdiction), section 68 (serious irregularity) or section 69 (appeal on a point of law) of the 1996 Act, but those provisions apply only to arbitrations with their seat in this jurisdiction (see section 2(1) of the 1996 Act), and therefore not to foreign New York Convention awards. Consistently with the interpretation of the Convention referred to above, the English courts have no jurisdiction to entertain a challenge to a foreign New York Convention award, otherwise than by way of objection to an application to recognise or enforce.

The above analysis is also apparent from and supported by the following dictum of Lord Collins of Mapesbury JSC in Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan [2009] UKSC 46, [2011] 1 AC 763 at [98]:

“Consequently, in an international commercial arbitration a party which objects to the jurisdiction of the tribunal has two options. It can challenge the tribunal’s jurisdiction in the courts of the arbitral seat; and it can resist enforcement in the court before which the award is brought for recognition and enforcement. These two options are not mutually exclusive, although in some cases a determination by the court of the seat may give rise to an issue estoppel or other preclusive effect in the court in which enforcement is sought. The fact that jurisdiction can no longer be challenged in the courts of the seat does not preclude consideration of the tribunal’s jurisdiction by the enforcing court: see, e g, Svenska Petroleum Exploration AB v Government of the Republic of Lithuania (No 2) [2007] QB 886, para 104 and Paklito Investment Ltd v Klockner East Asia Ltd [1993] 2 HKLR 39, 48, per Kaplan J.”

At [103] Lord Collins rejected the suggestion that only the supervisory court could carry out a re-hearing of the issue of the existence of a valid arbitration agreement. But it is clear that the right to raise that issue in the secondary jurisdiction is where a party is “seeking to resist an award…”.

Partial recognition and enforcement of an award under the New York Convention

The New York Convention recognises in Article V(1)(c) that an award may be recognised and enforced in part if other parts are not within the scope of the submission to arbitration and can be separated. But it has been recognised in this jurisdiction that partial recognition is permissible more generally, both as a matter of the interpretation of the Convention and of the 1996 Act. In IPCO (Nigeria) Ltd v Nigerian National Petroleum Corp [2008] EWCA Civ 1157, [2009] 1 All ER (Comm) 611 Tuckey LJ analysed the issue as follows:

“[14] So do the Convention and the 1996 Act prevent part enforcement of an award in a case such as this…? I start by thinking this is unlikely because the purpose of the Convention is to ensure the effective and speedy enforcement of international arbitration awards. An all or nothing approach to the enforcement of an award is inconsistent with this purpose and unnecessarily technical. I can see no objection in principle to enforcement of part of an award provided the part to be enforced can be ascertained from the face of the award and judgment can be given in the same terms as those in the award.

[15] The purpose behind the Convention is reflected in the language of the 1996 Act. Enforcement ‘shall not be refused’ except in the limited circumstances listed in s 103(2) where the court is not required to refuse but ‘may’ do so. Under sub-s (5) the court may adjourn but only if it considers it ‘proper’ to do so. The enforcing court’s role is not therefore entirely passive or mechanistic. The mere fact that a challenge has been made to the validity of an award in the home court does not prevent the enforcing court from enforcing the award if it considers the award to be manifestly valid…..

[16] …. There is nothing which expressly prevents part enforcement in the language of the Convention or the statute. At first sight s 103(4) supports [NNPC’s] argument. It does allow for part enforcement where the tribunal has strayed beyond the limits of its jurisdiction. But this provision was necessary to make it clear that such an error does not give grounds for saying that no part of the award should be enforced. No such provision is required for the other cases in s 103(2) which contemplate all or nothing challenges to the whole of the award.

[17] The statute refers of course to ‘an’ or ‘the’ ‘award’. Does this mean the whole award and nothing but the whole award…? I do not think so. Such a construction would have absurd commercial consequences and cannot have been intended…. IPCO gave the example of an award for £100m and a challenge only to a £5m part of it. On NNPC’s case the court could not enforce the £95m part of the award until after the challenge had been determined. This would encourage unscrupulous parties to mount minor challenges to awards so as to frustrate their speedy and effective enforcement. [NNPC’s] answer to this example was to say that in such a case the court could enforce the whole award. But if the challenge was a good one that would not be a sensible or fair solution either. ..

[18] In these circumstances I think that the word ‘award’ in this part of the 1996 Act should be construed to mean the award or part of it. To be enforceable it must be possible to enter judgment ‘in terms of the award’ but in this case there is no difficulty about that as the exact correspondence between the award and the judgment shows. Put less formally if one were to ask whether enforcement of part of an award in accordance with its terms was enforcement of the award the answer would be ‘of course’.”