Facts
Decision
Comment

The Court of Appeal has confirmed1.One course chosen by parties to navigate around the decision2. Of the European Court of Justice (ECJ) inWest Tankers (The Front Comor)(for further details please see"Courts can enforce declaratory arbitral award"The court has enforced). A declaratory award granted by the arbitral tribunal in that case, thereby confirming the High Court's approach inWest Tankers3.AndAfrican Fertilizers and Chemicals NIG Ltd V BD Shipsnavo GmbH.4.

Facts

The owners of the vessel, the Front Comor, had commenced arbitration in London against the insurers of voyage Charterers of the vessel pursuant to the charterparty, following a collision with a pier owned by the charterers

While the arbitration was pending, the insurers commenced proceedings in the Italian courts against the owners in relation to the same collision. An anti-suit injunction granted by the English courts, restraining the insurers from taking steps in the Italian court proceedings, was set aside following the ECJ decision

The arbitral tribunal found that the owners had contractual immunity under the terms of the charterparty and declared that the owners were not liable for the damage caused to the Charterers by the collision. The owners applied to the High Court under Section 66 of the Arbitration Act 1996 for the enforcement of the award, and sought that judgment be entered into in terms of the award. The application was granted

Decision

The Court of Appeal accepted a broad interpretation of Section 66 It held that the phrase "enforced in the same manner as a judgment to the same effect" is not confined to "the normal forms of execution" provided under the rules, such as the payment of a damages award. It may also include other means of "giving judicial force to the award on the same footing as a judgment", such as through the application of issue estoppel orRes Judicata(ie, the fact of the matter having already been judged This broader interpretation reflects the). Purpose of the act as well as the wider context of the arbitral process, the effectiveness of which requires support from the judicial system

The court emphasised that the enforcement of a judgment or award is the enforcement of the rights established in the judgment or award, whether that be a right to payment or some other right, such as a right in issue estoppel. Enforcement of an award as a judgment throughRes JudicataMay ensure the primacy of the award over a later judgment. However, the court emphasised that it would enforce a declaratory award in "appropriate only. cases"

Comment

Enforcement of a declaratory award may be just as important as enforcement of a monetary award. The approach of the English courts provides not only the necessary judicial force to assist parties in navigating around the ECJ decision inWest TankersBut also, the judicial support that is essential to the arbitral process in general

Whether the course of action chosen by the owners inWest TankersIs successful remains to be seen. The Court of Appeal did not determine whether an arbitral award converted into an English judgment will come within the scope of the Brussels I Regulation and thereby prevent the enforcement of an Italian judgment (that is in favour of the insurers That issue is likely). To be the subject of further proceedings before the English courts, and possibly the ECJ

For further information on this topic please contact Robert Lambert Or Jo Delaney At Clifford Chance LLP by telephone (+44 2070061000), fax (+44 2070065555) email (orRobert.lambert@cliffordchance.com Or Jo.delaney@cliffordchance.com)

Endnotes

1. West Tankers Inc V Allianz SpA[2012] EWCA Civ 27

2. SeeAllianz SpA (formerly Riunione Adriatic di Sicurta SpA V West Tankers Inc)(C-185/2007) (The Front Comor[2009] ECR I-663.)

3. West Tankers Inc V Allianz SpA, The Front Comor[2011] EWHC 829 (Comm)

4. [2011] EWHC 2452 (Comm)