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Dallah: Supreme Court dismisses appeal
Practical Law UK Legal Update Case Report 3-503-8082 (Approx. 3 pages)
Dallah: Supreme Court dismisses appeal
by PLC Arbitration
| Published on 03 Nov 2010 • England, Wales |
The Supreme Court has unanimously dismissed the appeal in Dallah Real Estate and Tourism Holding Company v Government of Pakistan [2010] UKSC 46. (Free access.)
The Supreme Court has unanimously dismissed Dallah's appeal in Dallah Real Estate and Tourism Holding Company v Government of Pakistan [2010] UKSC 46. The case raised the issue of whether the government of Pakistan (GoP) could resist enforcement in England of a French International Chamber of Commerce (ICC) arbitration award, on the basis that it was not party to the arbitration agreement, even though the tribunal had previously ruled that GoP was bound by the agreement.
As we previously reported, the Court of Appeal held that enforcement should be refused under section 103(2)(b) of the Arbitration Act 1996 because, on the evidence, GoP was not bound by the arbitration agreement (see Legal update, Court of Appeal upholds Dallah decision). Upholding the conclusions and reasoning of the Court of Appeal, the Supreme Court held that:
- The question of whether GoP was bound by the arbitration agreement fell to be determined by reference to all the evidence. The English court was not limited to reviewing the tribunal's own ruling on this issue, and was not required to defer to the tribunal's views.
- Dallah's argument that GoP was bound by the arbitration agreement as a matter of French law on the basis of the parties "common intention" was rejected. On the evidence (including expert evidence of French law), GoP was not so bound.
- Although section 103 confers on the court a limited discretion to allow enforcement even if one of the statutory defences to enforcement is established, that discretion will not be exercised in favour of the award creditor where there was no valid binding arbitration agreement and the tribunal lacked jurisdiction to make the award.
We will publish a fuller analysis and discussion of this important case shortly.