United Kingdom / 03 November 2010 / England and Wales, Supreme Court of United Kingdom / Dallah Real Estate and Tourism Holding Company v. Ministry of Religious Affairs, Government of Pakistan / UKSC 2009/0165
| Country | United Kingdom |
| Court | England and Wales, Supreme Court of United Kingdom |
| Date | 03 November 2010 |
| Parties | Dallah Real Estate and Tourism Holding Company v. Ministry of Religious Affairs, Government of Pakistan |
| Case number | UKSC 2009/0165 |
| Applicable NYC Provisions | II | IV | IV(1) | V | V(1) | V(1)(a) | V(1)(c) | V(1)(e) | V(2) | V(2)(b) | VI | VII | VII(1) |
| Source |
[2010] UKSC 46, [2011] 1 AC 763 | online: BAILII |
| Languages | English |
| Summary | Dallah, a Saudi Arabian company, entered into a memorandum of understanding with the Pakistani government regarding housing in Mecca, Saudi Arabia, for Pakistani pilgrims. A Pakistani presidential ordinance established a trust, which entered into an agreement with Dallah. This agreement provided for disputes between Dallah and the trust to be resolved by arbitration under the rules of the International Chamber of Commerce ("ICC"). After the trust had expired and therefore ceased its legal existence, Dallah instituted ICC arbitration in Paris against the Pakistani government’s Ministry of Religious Affairs. In a partial award on jurisdiction, the tribunal sitting in Paris held that the Ministry was bound by the arbitration agreement and that the tribunal accordingly had jurisdiction. It issued another partial award on liability and a final award in favour of Dallah. Dallah sought to enforce the final award in England. The government of Pakistan successfully resisted enforcement in the English High Court. The High Court set aside a previous order granting leave to enforce the award, under section 103(2)(b) of the Arbitration Act 1996 (U.K.) ("the Act") (which directly incorporates and whose wording is equivalent to Article V(1)(a) NYC's provision regarding invalidity of the arbitration agreement). Specifically, enforcement was refused due to the lack of a valid arbitration agreement between the parties under the law of the country where the award was made. Dallah appealed to the Court of Appeal, which dismissed Dallah's appeal. Dallah then appealed to the Supreme Court and also applied for enforcement of the final award in France. The Pakistani government applied in France to set aside all three awards. The U.K. Supreme Court refused to grant Dallah a stay of its appeal pending resolution of its French proceeding. The parties' submissions to the Supreme Court proceeded on the basis that the party resisting enforcement under Article V(1)(a) NYC had the burden to prove that it was not bound by the arbitration agreement. The Supreme Court affirmed the decisions of the lower courts and dismissed the appeal. Enforcement of the award was refused under section 103(2)(b) of the Act. Since there was no explicit choice of the law governing the arbitration agreement, the law governing its validity was held to be the law (excluding conflicts of law rules) of France, the country where the award was made. The Court stated that despite the NYC's pro-enforcement policy and the fact that the burden of proof is on the resisting party, the Court was not bound or limited by the tribunal's jurisdictional decision. The tribunal's reasoning was considered flawed as it did not follow what the Court considered to be the appropriate French legal standards. Under Article V(1)(a) NYC, validity of an arbitration agreement included the issue of whether a party was in fact bound by it. Accordingly, enforcement was refused under that provision. Given the lack of a valid and binding arbitration agreement between the parties, as required by Article II NYC, the Court also declined to enforce the award under any discretion stemming from the word "may" in Article V(1) NYC. The Court suggested, drawing on Article V(2)(b) NYC, that a different result could ensue if the foreign law invalidating the arbitration agreement violated an important public policy. It was also noted that absent party agreement in compliance with Article IV(1) NYC to submit the question of arbitrability to the tribunal, the NYC is not concerned with preliminary awards on jurisdiction (as against final awards). The Court also made brief references to Articles V(1)(c), V(1)(e), VI, and VII(1) NYC, distinguishing the effect of these provisions or case law applying them from this case. |
| affirms : | |
| see also : |
Attachment (1)
 Original Language Adobe Acrobat PDF |
