THE FOREIGN ARBITRAL AWARDS ENFORCEMENT ACT (1997 REVISION) and SECTIONS 52, 54 and 72 of THE ARBITRATION ACT, 2012 and an ARBITRATION BETWEEN MR NASSER SULAIMAN H M AL-HAIDAR and MR JETTY VENKATA UMA MAHESHWARA RAO (FIRST RESPONDENT) and PETRONASH GLOBAL Ltd (SECOND RESPONDENT) Between: Mr Nasser Sulaiman H M Al-Haidar Plaintiff v Mr Jetty Venkata Uma Maheshwara Rao Defendant
| Jurisdiction | Cayman Islands |
| Judge | Justice Kawaley |
| Judgment Date | 03 February 2023 |
| Docket Number | CAUSE NO. FSD 328 OF 2022(IKJ) |
| Court | Grand Court (Cayman Islands) |
IN THE MATTER OF THE FOREIGN ARBITRAL AWARDS ENFORCEMENT ACT (1997 REVISION)
AND IN THE MATTER OF SECTIONS 52, 54 AND 72 OF THE ARBITRATION ACT, 2012
AND IN THE MATTER OF AN ARBITRATION BETWEEN MR NASSER SULAIMAN H M AL-HAIDAR (CLAIMANT) AND MR JETTY VENKATA UMA MAHESHWARA RAO (FIRST RESPONDENT) AND PETRONASH GLOBAL LTD (SECOND RESPONDENT)
The Hon. Justice Kawaley
CAUSE NO. FSD 328 OF 2022(IKJ)
IN THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION
Mr Liam Faulkner of Campbells LLP, for the Plaintiff
IN CHAMBERS
Leave to enforce foreign interim arbitration award-governing principles-Foreign Arbitration Awards Enforcement Act (1997 Revision), sections 5-7-Arbitration Act, 2012 sections 52, 72
By an Ex Parte Originating Summons dated 23 December 2022, the Plaintiff applied for leave “ to enforce the Provisional Award dated 16 November 2022 awarded in DIAC Arbitration No. 60 of 2022 by a Tribunal constituted by Michael Black KC, Sapna Jhangiani KC and Professor Sir Bernard Rix (Presiding Arbitrator), read with the Tribunal's responses dated 16 November 2022 to the Defendant's application to discharge, suspend or modify the Provisional Award, and to other requests to modify and/or clarify the Provisional Award (the ‘Provisional Award’), in the same manner as a judgment or order of the Court to the same effect”.
Having determined it was appropriate to deal with the application on the papers, on 13 January 2023 I granted the relief sought on the Ex Parte Originating Summons.
As counsel submitted that there appeared to be no published local judgments on the enforceability of interim awards, it was clearly desirable that reasons should be given for that decision, which I now provide.
In Lam Global Management Ltd. II and Lam Global Management Ltd. III -v- AGPL Investment Ltd., FSD 226/2022 (IKJ), Judgment dated 13 December 2022 (unreported), I considered the legal principles governing granting ex parte leave to enforce a final foreign award under section 5 of the Foreign Arbitral Awards Enforcement Act (1997 Revision) (the “FAAEA”). In paragraph 8 of my Judgment in that case, I noted that: “ An ex parte application is expressly provided for. The pro-enforcement policy of the New York Convention is well recognised by this Court and understood.” I cited the observation of Martin JA in Essar Global Fund Ltd v Arcelormittal USA LLC [ 2021 (1) CILR 788] that “[i] n the majority of cases, obtaining leave to enforce an award is a straightforward matter” (at paragraph 14).
The grounds for refusing enforcement are limited, should be construed narrowly and the respondent will bear the burden at any inter partes hearing of demonstrating that such grounds are made out: Gol Linhas Aereas SA (formerly VRG Linhas Aereas SA) v MatlinPatterson Global Opportunities Partners (Cayman) II LP and Others [2022] UKPC 21 (per Lord Hamblen and Lord Legatt at paragraph 23).
The FAAE provides as follows:
“ 5. A Convention award shall, subject to this Law, be enforceable in the Grand Court in the same manner as an award under section 22 of the Arbitration Law (1996 Revision) and shall be treated as binding for all purposes on the persons between whom it was made and may accordingly be relied upon by any of those persons by way of defence, set off or otherwise in any legal proceedings in the Islands and any reference in this Law to enforcing a Convention award shall be construed as including references to relying upon such award.”
The Arbitration Act, 2012 (the “2012 Act”) provides:
“ Award may be enforced like judgment or order of court
72. (1) An award made by the arbitral tribunal pursuant to an arbitration agreement may, with leave of the court, be enforced in the same manner as a judgment or order of the court to the same effect.
(2) Where leave is given, judgment may be entered in terms of the award.
(3) Leave to enforce an award shall not be given where, or to the extent that, the person against whom it is sought to be enforced shows that the arbitral tribunal lacked jurisdiction to make the award.
(4) Nothing in this section affects the recognition or enforcement of an award under any other written law or rule of law and in particular the provisions of the Foreign Arbitral Awards Enforcement Law, 1997 relating to the recognition and enforcement of awards under the New York Convention or by an action on the award.
(5) An arbitral award, irrespective of the country in which it was made, shall be recognised as binding and, upon application to the court, shall be enforced subject (whether or not it is a convention award) to the provisions of sections 6 and 7 of the Foreign Arbitral Awards Enforcement Law, (1997 Revision).”
Section 2(1) provides: “‘ Convention award’ means an award made in pursuance of an arbitration agreement in the territory of a State, other than the Islands, which is a party to the New York Convention”. The Plaintiff's counsel submitted that:
“ 32. In the present case, a highly distinguished Tribunal considered the issue of whether to issue an order or an award and proceeded to issue a provisional award. In doing so, the Tribunal referred to the leading academic work of Born, International Commercial Arbitration, (3rd ed, 2021) at pp 2692- 26933. We would also note the following extract from the same academic textbook at page 2703:
‘The better view is that provisional measures should be and are enforceable as arbitral awards under generally applicable provisions for the recognition and enforcement of awards in the sense that they dispose of a request for relief pending the conclusion of the arbitration, which should be sufficient to justify treating such measures as “awards”.
Orders granting provisional relief are meant to be complied with, and to be enforceable, outside the arbitral process; they are in this respect different from interlocutory arbitral decisions that merely decide certain subsidiary legal issues (e.g. choice of law, liability) or prescribe procedural directives (such as timetables or hearing logistics), which are ordinarily neither ‘final’ nor ‘awards’. It is also highly important to the efficacy of the arbitral process for national courts to be able to enforce provisional measures. If this possibility does not exist, then parties will be able, and significantly more willing, to refuse to comply with orders of provisional relief, resulting in precisely the serious harm that provisional measures were meant to foreclose.
In contrast, there is no sound policy reason for withholding judicial enforcement mechanisms for tribunal-ordered provisional measures. The most serious concern would appear to be that national courts would be required repeatedly to enforce, and then possibly readjust their enforcement measures, if an arbitral tribunal altered the provisional relief it ordered. In reality, these sorts of alterations seldom occur and, if judicial enforcement were available, parties would almost invariably comply with tribunal-ordered provisional relief without the need for judicial enforcement.”
It was further argued:
“ 34. Befitting of Singapore's status as an international arbitration hub, the Singapore High Court has previously considered the issue and held that foreign interim or provisional awards can be enforced in Singapore: see CVG v CVH [2022] SGHC 249; and PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation (Indonesia) and another matter [2014] SGHC 146. In the PT Perusahaan Gas case, the Singapore High Court confirmed that a ‘provisional award’ is an award granting relief which is intended to be effective for a limited period, such as the period pending determination with finality of every aspect of the parties’ dispute, and that a provisional award is final and binding on its subject matter. The Singapore High Court also cited with approval the authoritative statement from Born on International...
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