United Kingdom / 01 August 2008 / England and Wales, High Court / Dallah Real Estate and Tourism Holding Company v. Ministry of Religious Affairs, Government of Pakistan
| Country | United Kingdom |
| Court | England and Wales, High Court |
| Date | 01 August 2008 |
| Parties | Dallah Real Estate and Tourism Holding Company v. Ministry of Religious Affairs, Government of Pakistan |
| Applicable NYC Provisions | V | V(1) | V(1)(a) | V(1)(e) |
| Source |
[2008] EWHC 1901 | online: BAILII |
| Languages | English |
| Summary | Dallah Real Estate and Tourism Holding Co. (“Dallah”) was a Saudi Arabian company. It concluded a memorandum of understanding with the Government of Pakistan (“the GoP”) regarding the provision of housing in Mecca for Pakistani pilgrims. A Pakistani presidential ordinance thereafter established a trust, which entered into an agreement with Dallah (“the Agreement”). Clause 23 of the Agreement provided for disputes between the trust and Dallah to be referred to arbitration in Paris under the Arbitration Rules of the International Chamber of Commerce. After the trust had expired and therefore ceased to exist as a legal entity, Dallah initiated arbitral proceedings in Paris against the Ministry of Religious Affairs of the GoP. In a partial award, the tribunal held that the GoP was bound by clause 23 of the Agreement and that the tribunal had jurisdiction to entertain Dallah’s claims. The tribunal subsequently issued a final award in favour of Dallah. Dallah applied to the English High Court for leave to enforce the final award pursuant to section 101(2) of the Arbitration Act 1996 (U.K.) (“the Act”) (providing for enforcement as a judgment or order of the court of an NYC award, as defined by the Act). The Court granted leave. The GoP then sought to set aside the order granting leave on the ground, inter alia, that the GoP was not bound by clause 23 of the Agreement and that enforcement of the award should therefore be refused pursuant to section 103(2)(b) of the Act (incorporating Article V(1)(a) NYC regarding refusal to recognise or enforce an award owing to invalidity of the arbitration agreement 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). The High Court set aside the order granting leave to enforce the award. In so ruling, the Court observed that Article V NYC drew a distinction between an agreement to refer future disputes to arbitration, on the one hand, and a subsequent referral of a particular dispute to arbitration, on the other. It pointed to Article V(1)(a) NYC and Article V(1)(c) NYC, referring to “the agreement referred to in Article II” and “the submission to arbitration”, respectively. The Court noted that this distinction was reflected in section 103 of the Act, pointing to section 103(2)(a) and section 103(2)(d), which referred to “the arbitration agreement” and “the submission to arbitration”, respectively. The Court concluded that the question whether a party was bound by “an arbitration agreement” for the purposes of section 103(2)(b) fell to be decided by reference to the underlying agreement to refer future disputes to arbitration, and not by reference to any subsequent individual referral. The Court then turned to consider whether the GoP was bound by clause 23 of the Agreement. In deciding that question, the Court observed that both section 103(2)(b) and Article V(1)(a) NYC clearly established that the parties could agree on the law that governed the validity of the arbitration agreement and, absent such an agreement, that the governing law was the law of the country where the award was made. In the present case, it found that as clause 23 did not specify the law to which it was subject, any question as to its validity was to be decided according to the law of the country where the award was rendered, being France. Next, the Court considered the issue of the scope of its enquiry in deciding whether to order enforcement under section 103 of the Act. In this respect, it reasoned that the party resisting enforcement was required to prove, on the balance of probabilities, one of the matters set out in paragraphs (a) to (f) of section 103. In the Court’s view, the party was entitled to adduce all relevant evidence on the facts, including foreign law, in order to meet that burden of proof. The Court went on to apply relevant principles of French law to arrive at the conclusion that the GoP was not bound by clause 23 of the Agreement. Finally, the Court concluded that there was no other reason to exercise its discretion to recognize and enforce the final award. |
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Attachment (1)
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