On Friday 24 June 2021 Howard Kennedy and Shardul Amarchand Mangaldas & Co. co-hosted an interactive webinar on 'Enforcement of Arbitral Awards'. In the context of arbitration in India, several recent cases have prompted discussions about the enforceability of arbitration awards. These issues go to the heart of what arbitration is about: final decisions which can be enforced promptly, where appropriate.
The speakers covered a variety of topics: enforcement against sovereign states; the issues arising out of the Cairn and Devas awards; interim injunctions to aid foreign arbitration awards; and the enforceability issues arising out of interim and emergency arbitration awards.
Don't hesitate to contact us if you are affected by these issues and need assistance, or if you would just like to talk through a related matter.
So what were the key takeaways from the session?
Enforcement of arbitration awards against sovereign states:
Whilst the ease of enforcement of arbitration awards is a major selling point as a dispute resolution mechanism, given the scope and efficiency of the New York Convention, enforcement against sovereign states is problematic.
The principle of Sovereign immunity means that states are granted immunity from the English court's jurisdiction (as they have in other jurisdictions as well). However, there are certain caveats to sovereign immunity. For example, if a state agrees in writing to submit a dispute to arbitration, the English court will have jurisdiction.
However, even if the court has jurisdiction, the property of a State is still immune from attachment or execution. Nevertheless, a distinction is drawn between state assets that are for commercial purposes and those that are for sovereign purposes, with the former being susceptible to enforcement.
Waivers of immunity on jurisdiction, and immunity as to execution are also hurdles to consider and overcome. Parties contracting with states must be alive to the difficulties with enforcement.
Enforcement issues arising out of the Cairn and Devas awards:
In Cairn v India, the tribunal found that the claims fell within their subject-matter jurisdiction and that India failed to uphold its obligations under the UK-India BIT. This made them liable to compensate Cairn for the total harm suffered.
In Devas v Antrix, the Supreme Court held that the courts could not invoke different arbitration rules once Devas had selected the presiding rules over arbitration, and the court does not have jurisdiction to interfere with proceedings unless they have been set aside.
The options for recovery can include enforcing the award under the New York Convention; however, one must be aware of the risks of set aside proceedings at the seat of arbitration. Therefore, consideration must be given to the choice of seat at the very outset of arbitration proceedings.
Where the seat is specifically in India, there is a greater risk of set aside proceedings, as these could lead to adverse consequences such as liquidation or contempt of Indian courts.
Interim injunctions and the enforcement of foreign arbitration awards - the Arcelor Mittal case:
In the Arcelor Mittal v Essar Steel case, the Commercial Court granted and upheld a worldwide freezing order, search orders and Norwich Pharmacal orders to aid enforcement of an award, despite the award being foreign, the fact that the Claimant and Defendant companies were foreign and that there were no significant assets within the jurisdiction.
The court found this to be a case involving international fraud, an exception to granting WFO's. This decision demonstrates that the English courts are prepared to expand their injunctive powers and ultimately act as an 'international policeman' when seeking to enforce arbitration awards.
Enforceability of interim arbitration and emergency arbitration awards:
The Amazon v Future Group case has significantly changed the prospects for enforceability of interim awards in India. The court found that the arbitration award under SIAC rules was valid in India.
Under section 17 of the Arbitration and Conciliation Act of 1996, interim measures are unenforceable. However, this is not fatal and the important question is whether these are binding and final. However, there are numerous factors that may hinder enforcement such as public policy, jurisdiction and practical considerations.
Who were our expert speakers at the session?
MODERATORS:
Duncan Bagshaw, Partner and Head of the International Arbitration Team at Howard Kennedy LLP.
Duncan is a barrister and practices exclusively in the fields of international arbitration and international litigation. He specialises in multi-jurisdictional cases and has extensive experience in Africa.
Shreya Gupta, Principal Associate at Shardul Amarchand Mangaldas.
Shreya is a specialist in international arbitration and has extensive experience of international commercial litigation.
SPEAKERS:
Arish Bharucha, Partner in the Commercial Dispute Resolution team and Chair of the India Group at Howard Kennedy LLP.
Arish is a Solicitor-Advocate and dual-qualified lawyer in Delhi. He has an established reputation for international arbitration, commercial litigation and civil fraud disputes, advising clients in high-stakes disputes in a variety of industries from commodities and technology to pharmaceuticals. Arish has been ranked for International Arbitration in Chambers UK 2020 and 2021.
Rishab Gupta: Partner at Shardul Amarchand Mangaldas, leading their Arbitration practice.
Rishab is qualified to practice in India, the USA, and UK where he is a solicitor advocate with higher rights of audience. Rishab represents clients in commercial and investor-state arbitrations across a multiplicity of sectors. Rishab is ranked in the Top 100 Individual Lawyers in the Forbes, India, Legal Powerlist, 2020.
Sudhanshu Swaroop QC: Queen's Counsel at Twenty Essex chambers.
Sudhanshu practices in commercial, arbitration and public international law. His commercial and arbitration practice encompasses shipping and international trade, baking and finance, energy and natural resources and investment treaties. Sudhanshu has been recognised in The Lawyer magazine's "Hot 100" lawyers.
Karishma Vora: Barrister at 39 Essex Chambers.
Karishma is a dual qualified barrister in India and England. Karishma runs her own set of Chambers in Mumbai and has become a go-to expert in both jurisdictions. She is an expert in commercial litigation and international arbitration, representing companies and individuals in high value claims in the Commercial Court and arbitrations seated in London, Geneva, Singapore and India. She has an established reputation in private equity and banking disputes, and industry expertise in steel, metals, diamonds & jewellery, technology and pharmaceuticals. Karishma is ranked as a leading junior and leading individual in the Legal 500 UK and EMEA 2021.
If you would like to watch the webinar, you can view the recording here:
https://www.howardkennedy.com/Latest/Event/Enforcement-power-of-arbitration_24-June-2021
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