Nomihold Securites Inc v Mobile Telesystems Finance SA

Enforcement of an arbitration award as a judgment under section 66 of the Arbitration Act 1996 is discretionary, but an unchallenged monetary award should ordinarily be enforced. A claimant need not generally prove utility or legitimate interest at the ex parte stage. Such matters may be relevant when enforcement is challenged. Public-policy objections require a high threshold and cannot reopen the arbitration. Alleged fraud or perjury must be supported by cogent fresh evidence satisfying the Ladd v Marshall test. The court refused to reopen a final award where the evidence was late, multiple hearsay and incapable of materially affecting the result.

The claimant obtained an LCIA award requiring the defendant to pay US$170 million for the remaining shares in Tarino Ltd, together with damages, interest and costs. Gloster J entered judgment in the terms of the award and granted leave to enforce it under section 66 of the Arbitration Act 1996.

The defendant applied to set aside that order. It alleged that enforcement would offend English public policy because of money-laundering concerns and that the award had been obtained by fraud or perjury. It also sought an adjournment pending related foreign proceedings. The issues were whether there was a legitimate interest in enforcement as a judgment and whether the objections justified reopening or refusing enforcement of the final award.

1. Enforcement under section 66. The power to enforce an award as a judgment is discretionary. An unchallenged award should ordinarily be given effect, and enforcement should not be withheld merely because the losing party wishes to raise points that could have been advanced earlier. For a monetary award, there is generally no separate requirement to prove utility or legitimate interest. Such matters may nevertheless be considered where a defendant raises them, particularly in relation to a declaratory award.
2. There was a legitimate interest in this case. The claimant sought the practical protection of a judgment from the supervisory court, including because the defendant argued that an award-based freezing order might not restrict repayment of its principal asset. Parallel Luxembourg proceedings also provided a legitimate reason to obtain a decision from the court of the seat. An adjournment pending foreign proceedings was inappropriate.
3. Public policy. The exception is confined to English public policy and must be approached with extreme caution. It cannot provide a means of rearguing matters determined in the arbitration. The alleged money laundering concerned the earlier acquisition of Bitel shares, and the evidence did not show that the claimant’s shares represented criminal proceeds or that laundering substantially contributed to the award. Enforcement therefore did not offend English public policy.
4. Fraud and fresh evidence. After the time for challenging the award had expired, the defendant had to show a real ground for challenging its validity by cogent evidence satisfying the three Ladd v Marshall conditions. The evidence had to be unavailable with reasonable diligence, materially influential, and apparently credible. The evidence relied on was multiple hearsay, its late availability was inadequately explained, and the alleged lie would not have changed the arbitrators’ conclusions. Reopening the issue would undermine the finality of arbitration awards.
5. The defendant’s application was dismissed. Gloster J’s order was affirmed and the award was enforced as a judgment.

The judgment records that the Court of Appeal had allowed the defendant’s appeal concerning variation of the freezing order on 26 July 2011, with reasons to follow. The present application was distinct and was dismissed by the High Court.