The New York Convention

The Court of Appeal, in Dallah Estate & Tourism Holding Co v Ministry of Religious Affairs, Government of Pakistan [2009] EWCA Civ 755, has upheld the first instance decision of Aikens J (discussed in the May 2009 issue of Arbitration Law Monthly) to refuse enforcement of an arbitration handed down in France. The learned judge ruled that the substantive agreement was governed by French law and, under that law, the defendant, the Government of Pakistan, was not a party to the arbitration clause. In upholding the decision, the Court of Appeal undertook an important analysis of the grounds upon which a foreign award can be refused enforcement under the New York Convention, and also of the exercise of the court’s discretion to grant enforcement even though a ground for refusal had been made out.

Dallah: the background

Dallah was a member of a Saudi Arabian group of companies which provided services to Muslims, including accommodation, transportation and medical facilities for pilgrims visiting Mecca. The Pakistanti Ministry of Religious Affairs (’MORA’) was a part of the Government of Pakistan and had responsibility for ensuring the welfare and safety of pilgrims in pilgrimages beyond Pakistan. On 24 July 1995 Dallah entered into a Memorandum of Understanding with the Pakistani Government, through MORA. The effect of the agreement was that Dallah would acquire land in Mecca for the construction of housing facilities for Pakistani pilgrims, and that the houses would be leased for 99 years to the Government of Pakistan. Financing issues were at that point not resolved. On 18 November 1995 Dallah acquired some 43,00 square metres of land in Mecca for the purpose of implementing the agreement.