DALLAH REAL ESTATE AND TOURISM HOLDING CO V MINISTRY OF RELIGIOUS AFFAIRS, GOVERNMENT OF PAKISTAN

[2008] EWHC 1901 (Comm), Queen’s Bench Division, Commercial Court, Mr Justice Aikens, 1 August 2008

Arbitration – Enforcement – New York Convention 1958 – Defendant claiming not to be a party to award – Whether enforcement could be challenged on the basis that the award was not valid under the laws of the country where the award was made – Arbitration Act 1996, sections 101 and 102

The claimant commenced an ICC arbitration against the defendant, a ministry of the Government of Pakistan. The defendant contested jurisdiction, arguing that it was not a party to the arbitration agreement. The arbitrators held that the law applicable to the arbitration clause was “those transnational general principles and usages reflecting the fundamental requirements of justice in international trade and the concept of good faith in business” and found in their first partial award that GoP was a party. In a subsequent final award issued in France the arbitrators ordered GoP to pay the sum of US$20,588,040. GoP did not appeal against the award to the French courts. The claimant sought an order from the English court enforcing the award and the defendant argued that enforcement should be refused on the ground set out in section 103(2)(b) of the Arbitration Act 1996, ie that it was “not valid under the law to which the parties subjected it, or failing any indication thereon, under the law of the country where the award was made”. Aikens J held that the award should not be enforced.