United Kingdom / 24 January 2012 / England and Wales, Court of Appeal / West Tankers Inc v. RAS Riunione Adriatica di Sicurta SpA and Generali Assicurazioni Generali SpA / A3/2011/1118
| Country | United Kingdom |
| Court | England and Wales, Court of Appeal |
| Date | 24 January 2012 |
| Parties | West Tankers Inc v. RAS Riunione Adriatica di Sicurta SpA and Generali Assicurazioni Generali SpA |
| Case number | A3/2011/1118 |
| Source |
[2012] EWCA Civ 27 | online: BAILII |
| Languages | English |
| Summary | West Tankers Inc. (“West Tankers”) chartered a vessel to Erg Petroli S.p.A. (“EP”) under a charterparty. The vessel was damaged when it collided with a pier owned by West Tankers. A dispute arose between EP’s insurers (who were subrogated to any claims of EP against West Tankers) and West Tankers concerning which party was responsible for the collision. The dispute was referred to arbitration in London in accordance with an arbitral clause in the charterparty. The tribunal found that West Tankers had contractual immunity under the terms of the charterparty from responsibility to EP for the damage to the vessel and rendered an award declaring that West Tankers was under no liability to the insurers in respect of the collision. West Tankers obtained an order from the English High Court under section 66 of the Arbitration Act 1996 (U.K.) (“the Act”) entering judgment against the insurers in terms of the award. Meanwhile, the insurers initiated proceedings against West Tankers before the Italian courts. (West Tankers then sought, and obtained, an injunction from the English High Court to restrain the insurers from pursuing the Italian court proceedings. The insurers appealed to the House of Lords, which referred to the European Court of Justice (“the ECJ”) the question whether it was compatible with European Council Regulation 44/2001 (“the Regulation”) for a court of a Member State to grant an anti-suit injunction to restrain a party from commencing or continuing proceedings in a court of another Member State on the ground that the proceedings were in breach of an arbitration agreement. The ECJ subsequently answered that question in the negative, holding that an anti-suit injunction enforcing an arbitration agreement was incompatible with the Regulation.) The insurers also applied to the English High Court to have the section 66 order set aside on the ground that there was no power under that section to order judgment in terms of the award where the award was declaratory in form, especially where, as in the present case, it took the form of a negative declaration (i.e., a declaration that the successful party has no legal liability to the other party). In the insurers’ submission, such a declaration did not require anybody to do anything and was therefore incapable of being “enforced”. West Tankers opposed the application, on the basis that the purpose of section 66 was to provide a means for the successful party in an arbitration to obtain the benefit of an award and that the word “enforced” should be construed accordingly. In this regard, West Tankers submitted that it intended to use the section 66 order to defeat any inconsistent judgment of an Italian court. At first instance, the High Court dismissed the insurers’ application to have the order set aside, agreeing with West Tankers’ broad construction of the word “enforced” within the meaning of section 66. The insurers appealed, asserting that the Court had erred in law in its construction of section 66 by, inter alia, giving the word “enforced” in section 66 an unnaturally wide meaning. In so arguing on the appeal, the insurers drew attention to the fact that sections 101 and 102 of the Act referred, in the context of NYC awards, to “recognition” and “enforcement” separately, which, they submitted, further demonstrated that these were two different concepts. The Court of Appeal dismissed the appeal, finding that a broader interpretation of the word “enforced”, as accepted by the High Court, was closer to the purpose of the Act. The Court noted that the efficacy of any arbitral award depended on the assistance of the courts. It also observed that, at common law, a party seeking to enforce a declaratory award could apply to a court for a declaration in the same terms. The Court considered that the purpose of section 66 was to provide a simpler alternative route to enforcement. Finally, the Court noted that the insurers had not raised any alternative argument as to the validity of the award, or as to why the order might not have been in the interests of justice. |
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