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In Star Hydro Power Ltd v National Transmission and Despatch Company Ltd [2025] EWCA Civ 928, the English Court of Appeal granted an anti-suit injunction to restrain the pursuit of Pakistani proceedings in relation to an award issued in a London-seated arbitration. In doing so, the Court of Appeal held that the New York Convention does not provide for pre-emptive challenges to the award outside the seat of arbitration. Instead, it provides only a shield, not a sword, against applications for the recognition or enforcement of the award.
Background
Star Hydro Power Limited (“SHPL”), a Korean-owned power producer incorporated in Pakistan, obtained an LCIA arbitration award (London seat) against National Transmission and Despatch Company Ltd (“NTDCL”), a Pakistan state-owned entity.
After the award was issued (but before SHPL sought to recognise or enforce the award in any jurisdiction), NTDCL commenced proceedings in Lahore, Pakistan, to seek the “partial recognition and enforcement” of a single paragraph of the award. It also invited the Lahore court to find that the rest of the award was unenforceable under Article V of the New York Convention (the “Convention”).
SHPL applied for an interim anti-suit injunction to restrain NTDCL from pursuing the Lahore proceedings. The English High Court refused SHPL’s application. It held that:
(i) it must be assumed that a court would only recognise or enforce an award in compliance with the Convention, and the English courts have no policing role in that respect;
(ii) a losing party is entitled to pre-emptively assert a right to resist recognition and enforcement (i.e. it need not wait for the winning party to first seek enforcement or recognition before bringing its own challenge to the award); and
(iii) applying principles of comity, it would be wrong for the English court to intervene and determine what issues should and should not be left to the Pakistani courts.
The English High Court also disagreed with SHPL’s contention that the Lahore proceedings had nothing to do with recognition and enforcement, but were instead a root and branch attack on the award.
SHPL was granted permission to appeal on the question of whether an application may be made under the Convention pre-emptively. It was also given leave to argue that the Lahore proceedings were brought in breach of the arbitration agreement in an attempt to undermine the award. The Court of Appeal allowed the appeal, and granted the anti-suit injunction in favour of SHPL.
What is the role of the English court (in the context of a London-seated award)?
The Court of Appeal disagreed with the proposition that an English court (being the supervisory court in relation to a London-seated award) has no “policing” role if a party seeks to use the Convention to challenge the award in a foreign jurisdiction. In its view, the English court (as the supervisory court) has exclusive jurisdiction in relation to proceedings to challenge the award. It must accordingly enforce the arbitration agreement and its exclusive jurisdiction if a party is bringing foreign proceedings in breach of them, and need not have any hesitation by reasons of comity in doing so.
Can NTDCL pre-emptively challenge the award in Pakistan under the Convention?
The Court of Appeal clarified that Convention is concerned only with applications for the recognition or enforcement of an award. In its view, Article V provides a shield (or a defence) against such applications. Therefore, and contrary to the judge’s decision, Article V does not operate as a sword by which an award may be attacked pre-emptively. To find otherwise would undermine the role of the supervisory court as the exclusive jurisdiction for challenges to arbitral awards.
What is the true nature of NTDCL’s application to the Pakistani courts?
While it recognised that an award can, in principle, be partially recognised and enforced, the Court of Appeal considered that NTDCL’s application was not a genuine attempt to seek partial enforcement. Instead, “the true nature and effect of the relief sought” by NTDCL was to invite the Lahore court to make a finding that the arbitrator lacked jurisdiction to reach his decision. This amounted to a “full-throated challenge” to the award, brought in breach of the arbitration clause and the exclusive jurisdiction of the English court – which must be restrained by anti-suit injunction.
Comment and conclusions
The Court of Appeal’s decision demonstrates that the English courts will look to substance, not form, when it comes to considering the granting of anti-suit injunctions in restraining foreign proceedings. Accordingly, a losing party cannot use foreign courts, under the guise of a pre-emptive application, to challenge an award before recognition or enforcement is even sought by the winning party. This decision provides welcome reassurance that only courts at the seat of arbitration could set aside an arbitral award. English courts will robustly defend this principle by restraining attempts to use Article V as a sword in foreign proceedings to undermine arbitral awards.
Click here for the judgment.