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M v N [2021] EWHC 360 (Comm) is a powerful reflection of the robust stance of the English courts to the enforcement of arbitral awards. In this case, the Commercial Court upheld a decision to bypass the Hague Service Convention in order to secure prompt service of an order granting enforcement of an award.
Background to the application
Just over 2 years ago, the claimant (“M”) obtained an award against the respondent (“N”) in a GAFTA arbitration with seat in England. N did not challenge the award, but nor did it pay up
In December 2020, M therefore applied to the English High Court for measures to help it have the award satisfied. In particular:
As is usual, the application for the Order was dealt with “on the papers”, with enforcement of the award within England stayed until the Order was served on N (and N’s right to apply to set it aside had either expired or been determined).
N was in Egypt which is (along with the UK) party to the Hague Service Convention (“HSC”). So ordinarily the Order, as a UK judicial document, would have had to be served in accordance with it. Since Egypt objects to the derogable means of service in Article 10 HSC this meant that Egypt’s designated authority would have to be used. Evidence (discussed further below) showed that this would face delays. Accordingly, M had obtained permission to serve the Order by alternative methods; namely via email on N’s vice chairman and recorded delivery to N’s address.
N applied to the English courts to set aside that grant of permission for alternative service.
Decision of Foxton J
Foxton J reviewed past authorities in this area. Under CPR 6.15 (1), English courts may make an order permitting alternative service where there is “good reason”. However, in cases where the judicial document is otherwise to be transmitted into a HSC Contracting State that has objected to service other than through its designated authority, permission for alternative service is only granted by the English courts in “exceptional” or “special” circumstances.
Foxton J held that the order for alternative service granted by Cockerill J was “amply justified”, despite this high standard. The main factors in his reasoning were:
Comment
This decision is of interest in extending, into the enforcement sphere, the policy behind the court’s approach to permitting service of ancillary court proceedings on English lawyers in English seated arbitrations. In fact, Foxton J considered that the policy of “speedy finality” in arbitration was even more compelling at the enforcement stage given that the parties’ substantive dispute will have been determined. This stance shows that the English courts can be expected to take a robust approach to the enforcement of arbitration awards.
Reyna Ge would like to thank Robert Anderson for his assistance in the preparation of this article.
20 April 2021
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