United Kingdom / 12 March 1993 / England and Wales, Court of Appeal / Soleh Boneh International Ltd v. Government of the Republic of Uganda and National Housing Corporation
| Country | United Kingdom |
| Court | England and Wales, Court of Appeal |
| Date | 12 March 1993 |
| Parties | Soleh Boneh International Ltd v. Government of the Republic of Uganda and National Housing Corporation |
| Applicable NYC Provisions | VI |
| Source |
[1993] 2 Lloyd's Rep 208 |
| Languages | English |
| Summary | A consortium of Israeli companies contracted to carry out building works in Uganda for the National Housing Corporation, an entity associated with the Ugandan government. The contract was guaranteed by the Ugandan government. A dispute arose, which the contractors referred to arbitration in Sweden. A sole arbitrator appointed by the Court of Arbitration of the International Chamber of Commerce made both an interim award and a final award in favour of the contractors. The defendants initiated court proceedings in Sweden challenging the validity of the awards on the grounds of invalid arbitrator appointment and sovereign immunity. Meanwhile, the contractors sought leave to enforce the awards in the United Kingdom. The High Court adjourned the enforcement proceedings pending determination of the Swedish proceedings and ordered the defendants to provide security under section 5(5) of the Arbitration Act 1975 (U.K.) ("the Act") (which directly incorporates and whose wording is equivalent to Article VI NYC). The amount of security ordered equalled the amount of the award plus interest. The defendants appealed this order. The Court of Appeal upheld the order for security, but decreased the amount of security ordered. The Court held that two factors were relevant to an inquiry into whether to order security. The first factor was the strength of the arguments as to the award's invalidity. If the award is manifestly invalid, a court should not order security. If the award is manifestly valid, the court should order either immediate enforcement or substantial security. There would be a range of possibilities in between. The second factor was the difficulty or ease of enforcement. The case for security would be stronger if enforcement would be more difficult if delayed, and weaker if there would be insufficient assets in any event. In this case, the Court found it seriously arguable that the award was invalid on the ground of invalid arbitrator appointment. Finally, the Court held that the State Immunity Act 1976 (U.K.) was no bar to security being ordered in this case. |
| see also : |
|
Attachment (1)
 Original Pending Adobe Acrobat PDF |
