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In Eastern European Engineering Ltd v Vijay Construction (Proprietary) Ltd [2018] EWHC 2713 (Comm) the English Commercial Court provided useful confirmation of the high bar to be met in an application to set aside enforcement of an international arbitration award where the award had already been unsuccessfully challenged at the seat of the arbitration.
Both the claimant, Eastern European Engineering Ltd (EEEL), and the defendant, Vijay Construction (Proprietary) Ltd (VCL), are incorporated in the Seychelles. Disputes arose under six materially identical contracts between the two parties, and the contracts were eventually terminated by EEEL.
EEEL referred the disputes to an ICC arbitration seated in Paris. A sole arbitrator made an award in EEEL’s favour in November 2014 (the Award).
On 18 August 2015, Cooke J granted permission to EEEL to enforce the Award and to enter judgment against VCL (the August 2015 Order). In October 2015, VCL applied under s.103 Arbitration Act 1996 to set aside the August 2015 Order, but that application was stayed while French and Seychellois proceedings were pending (see below).
VCL sought to have the Award set aside by the French courts (the arbitration having been seated in Paris) on the basis of three main grounds: that EEEL failed to observe the requirements of the arbitration clause in the parties’ contract, meaning the tribunal lacked jurisdiction; that there had been procedural unfairness resulting in VCL’s inability to present its case; and that there had been interference with a witness rendering enforcement of the Award contrary to public policy.
The Cour d’Appel dismissed VCL’s challenge. VCL initially appealed against that decision to the Cour de Cassation, but it abandoned that process and the appeal was subsequently dismissed in May 2017.
To prevent enforcement, VCL also initiated protective proceedings in the Seychelles in January 2015, seeking to set aside the Award on essentially the same grounds as those on which the challenges were based in the arbitration and in the French proceedings. In April 2017, the Seychellois court dismissed all of VCL’s challenges and held that the Award was enforceable.
The Seychelles Court of Appeal allowed VCL’s appeal to refuse recognition and enforcement on the basis the Seychelles had repudiated the New York Convention, but the substantive grounds were not considered by the Court of Appeal.
22 November 2018
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