Honeywell International Middle East Ltd v Meydan Group Llc

Recognition and enforcement of a New York Convention award must ordinarily be ordered unless a ground in section 103 of the Arbitration Act 1996 is established. The grounds are exhaustive and must be construed narrowly. Although section 103(2) uses the word “may”, the discretion is limited and will normally be exercised against enforcement only where the ground reflects a fundamental or structural defect, or reliance on it has not been lost by waiver, estoppel or another recognised principle.

On an application to set aside enforcement, the court may determine the matter summarily where there is no real prospect of establishing a section 103 ground and no compelling reason for a trial. A party that elects not to participate in the arbitration cannot generally rely later on matters it could have raised before the tribunal.

Honeywell obtained a Dubai International Arbitration Centre award against Meydan for approximately £12.6 million. The award was made on 1 March 2012. Honeywell obtained an order under section 101(2) of the Arbitration Act 1996 granting leave to enforce the award in England.

Meydan applied to set aside that order. It alleged bribery, defects in the appointment and composition of the tribunal, misnomer of the respondent, use of the wrong DIAC rules, the introduction of new claims, fraud and perjury, non-arbitrability, suspension of the award in Dubai, public-policy objections and material non-disclosure. The central issue was whether any asserted ground had a real prospect of success or required a full trial.

1. The application to set aside the enforcement order was dismissed. Paragraph 2 of the order therefore took effect, and the parties were directed to prepare a draft order.

2. Under section 103(1) of the Arbitration Act 1996, enforcement must be ordered unless a statutory ground is established. The grounds in section 103(2) and (3) are exhaustive and are to be applied restrictively. The discretion in section 103(2) is not open-ended.

3. The court should generally determine objections summarily. It should assess the evidence critically and ask whether there is a realistic prospect of establishing a statutory ground, or a compelling reason for a trial. A party should not obtain a trial merely by suggesting that further evidence may emerge.

4. The bribery allegation had no real prospect of success. The alleged payment was disclosed to a senior Meydan employee and the evidence was available during the arbitration. In any event, the alleged payment related to an earlier tender and was not shown to have procured the later contract or its arbitration agreement. Article 6.1 of the applicable DIAC Rules also embodied separability, so invalidity of the underlying contract would not itself invalidate the arbitration agreement.

5. The 2007 DIAC Rules applied. A contractual reference to superseded institutional rules ordinarily refers to the rules in force when arbitration is commenced unless clear words provide otherwise. Meydan had adequate notice of the arbitration and every opportunity to nominate an arbitrator. The naming of Meydan LLC was a misnomer, not a failure to identify the relevant legal person. Financial or administrative difficulties in funding representation did not constitute incapacity under section 103(2)(a).

6. The tribunal was entitled under Rules 26.1 and 26.2 to permit the termination claims to be introduced. Meydan received the Statement of Claim and related documents but chose not to participate. It could not complain that the tribunal failed to highlight matters that would have been apparent to a participating party.

7. The Dubai proceedings did not suspend or set aside the award. Under the applicable DIAC Rules the award was final and binding. Ratification proceedings in the courts at the seat did not affect its binding status for English enforcement, and section 103(2)(f) required an order or decision actually suspending or setting aside the award.

8. The allegations of forgery, perjury and non-arbitrability were unsupported and could have been raised before the tribunal. Enforcement of a contract procured by bribery was not, as a matter of English public policy, automatically prohibited, although the innocent principal might have a right to avoid it. No separate public-policy or non-disclosure ground was established.

First-instance decision. No appellate history was stated in the judgment.