United Kingdom / 20 July 2009 / England and Wales, Court of Appeal / Dallah Estate and Tourism Holding Company v. Ministry of Religious Affairs, Government of Pakistan / 2008/2613
| Country | United Kingdom |
| Court | England and Wales, Court of Appeal |
| Date | 20 July 2009 |
| Parties | Dallah Estate and Tourism Holding Company v. Ministry of Religious Affairs, Government of Pakistan |
| Case number | 2008/2613 |
| Applicable NYC Provisions | V | V(1) | V(1)(a) | V(1)(d) | V(1)(e) | VI | VII | VII(1) |
| Source |
[2009] EWCA Civ 755 | 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, arguing, inter alia, that section 103(2) of the Act permitted only a limited review of the tribunal's jurisdictional decision. The Court of Appeal dismissed Dallah's appeal. Enforcement of the award was refused under section 103(2)(b) of the Act. The Court of Appeal made four main holdings. First, it affirmed the High Court's holding that an enforcing court need not restrict itself to a limited review of an arbitral tribunal's jurisdictional decision (although the tribunal's reasoning should be considered). The enforcing court was entitled to rehear and reconsider all relevant evidence on the facts, which included issues of foreign law. This conclusion was derived from section 103(2) of the Act (which, as the Court noted, directly incorporates and whose wording is equivalent to Article V(1) NYC), requiring the party resisting enforcement to prove the existence of one of the grounds as a matter of fact. The power of the courts of the seat to set aside awards, referred to in Article V(1)(e) NYC (which directly incorporates and whose wording is equivalent to Article V(1)(e) NYC) did not call for an opposite conclusion. Second, since there was no explicit choice of the law governing the arbitration agreement in this case, the law governing its validity was held to be the law of France, the country where the award was made. The Court ruled that the High Court had correctly applied French law to find that the Pakistani government was not bound by the arbitration agreement. Third, it held that the Pakistani government was not estopped from resisting enforcement in England. The government's solicitors had earlier declared an intent not to challenge the award in France, while noting that a successful challenge would have allowed them to resist enforcement under section 103(2)(f) of the Act. The Court ruled that the fact that an award had not been challenged or had been upheld on challenge in the courts of the arbitral seat did not prevent a party from resisting its enforcement elsewhere. Fourth, the Court refused to enforce the award under any discretion stemming from the word "may" in Article V(1) NYC, given the lack of a valid and binding arbitration agreement between the parties. The Court noted that such discretion may be broader under other circumstances or in other jurisdictions. |
| affirmed by : |
Attachment (1)
 Original Language Adobe Acrobat PDF |
