Earlier this year, Butcher J handed down the judgment of the Commercial Court in the extraordinary case of Contax Partners Inc BVI v
Enforcement of arbitration awards
In the vast majority of cases, an award obtained in an arbitration will be enforced in
A s.66 application must be made using an arbitration claim form, following the procedure in Part 62 of the CPR. Where the party seeking to enforce the award wishes to enforce it as if it were a judgment or order (as opposed to seeking that a judgment be entered), the application can be - and frequently is - made without notice, and will ordinarily be considered by the court on the papers.
CPR r62.18(9) provides a safeguard: a defendant may apply to set aside an order enforcing an award within 14 days of service of the order upon them (or a longer period set by the court if the order is to be served out of the jurisdiction), and the order may not be enforced until that period has expired or any such application by the defendant has been finally disposed of. This preserves the ability of the defendant to challenge enforcement of the award, whether by claiming that the tribunal lacked substantive jurisdiction under s.66(3) of the Arbitration Act 1996 or on some other ground.
The fraud
An arbitration claim form was issued naming Contax Partners Inc BVI ("
The evidence filed in support of the claim stated that
A witness statement from Mr
On
At around this time, just as the persons behind the claim were on the cusp of abstracting over Ł3m, KFH finally became alerted to the claim as a result of the bank accounts subject to the interim TPDOs being frozen, and it made an urgent application on
A notice of change was then filed, stating that
KFH's challenge
KFH claimed it had never signed any arbitration agreement with
- Evidence from persons named in the arbitration award (as lay witnesses, expert witnesses, and counsel) who stated they had not participated in any such proceedings.
- Correspondence from the relevant Kuwaiti authorities stating that there was no record of any proceedings between
Contax and KFH. - Expert evidence that the award and the CoA judgment would have been in Arabic if genuine, and that the judges named in the purported judgment are not judges of the CoA.
The most astonishing feature of the case was that the purported arbitration award appeared to be virtually verbatim identical to the judgment of Picken J in Manoukian v Société Générale de Banque au Liban SAL [2022] EWHC 669 (QB), save that the names of all persons named in that judgment had been transposed.
The findings of the Judge
On the first hearing of KFH's application to set aside Butcher J's
Further evidence was then filed very late by a party alleging it had taken an assignment of the debt owed to
However, the Judge had fairly little hesitation in finding that the arbitration agreement and award were fabrications, partly because of the evidence relied upon by KFH and partly due to a lack of corroboratory evidence in relation to the arbitration agreement itself (such as the original of the agreement, or contemporaneous correspondence relating to it). The Judge therefore set aside his order of
Conclusions
The decision stands as authority - if any were needed - that a forged arbitration agreement or (probably more importantly) a forged arbitration award cannot be enforced, and that any order granting enforcement must be set aside if forgery is established.
There are also positive lessons to learn from KFH's conduct. KFH only narrowly avoided a TPDO being executed by rapidly securing an urgent injunction, and was extremely thorough in its approach to debunking the fabricated award.
Finally, the case underlines the importance of proper service, particularly in relation to ex parte procedures. Had there been a deeper inquiry into service at the stage of the TPDOs being obtained, the fraud may well have been discovered sooner. It is, in the view of the author, difficult to see how the procedure under s.66 could be modified so as meaningfully to mitigate the risk of fraud without at the same time negating the ready enforceability and status of genuine arbitration awards.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Mr
Gatehouse Chambers
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Gray's Inn
WC1X 8BS
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E-mail: ashley.allen@gatehouselaw.co.uk
URL: gatehouselaw.co.uk/
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