Effect of challenge to award

The English court has jurisdiction under the New York Convention to refuse or stay the enforcement of an award given in another country where the award is not binding, or is subject to challenge in that country. The manner in which these defences should be approached was discussed by Burton J in Dowans Holdings SA and Anr v Tanzania Electric Supply Co Ltd [2011] EWHC 1957 (Comm).

Dowans: the facts

The disputes arose under an Emergency Power Off-Take Agreement (POA) dated 23 June 2006 under which electricity was supplied to TES by the claimants from 26 January 2007 until 11 August 2008. By a letter dated 11 August 2008 TES informed DHSA that the POA was void ab initio because it infringed provisions of the prohibitions contained in the Tanzanian Public Procurement Act 2004. This was treated as a repudiation by the claimants, and the arbitration against TES was commenced in accordance with the ICC arbitration clause in the POA. By an award dated 15 November 2010 the tribunal ruled that the POA was valid and that TES was liable for damages of about US$65m plus interest.