Ekran OAO v Magneco Metrel UK Ltd

For the purposes of Arbitration Act 1996, s 103(2)(c), proper notice is notice likely to bring the relevant information to the notified party’s attention. The court assesses that question factually and in light of the parties’ contractual dispute-resolution mechanism and any applicable institutional rules.

Notice is not invalid merely because it is received in a language other than English. The circumstances may nevertheless make language material. Where the contract provides for arbitration through a specified foreign institution, the institution’s communications clearly identify that body and the surrounding circumstances make arbitration apparent, a recipient may reasonably be expected to obtain a translation. The recipient cannot then establish lack of proper notice or inability to present its case merely because the detailed communication was in a foreign language.

The claimant obtained an award from the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation concerning a contractual dispute with the defendant. The award was made in Moscow under a contract governed by Russian law and providing for arbitration in Russian.

Males J had granted the claimant leave to enforce the award and entered judgment under Arbitration Act 1996, s 101. The defendant applied under s 103(2)(c) and CPR r 62.18(9) to set that order aside, alleging inadequate notice of the arbitration, the arbitrators’ appointment and the hearing, and an inability to present its case. The central issue was whether the Russian-language communications delivered by the arbitral institution constituted proper notice.

1. Application dismissed. The defendant was given proper notice of the arbitration proceedings and of the appointment of the arbitrators, and was otherwise able to present its case. There were therefore no grounds under s 103(2)(c) of the Arbitration Act 1996 to refuse recognition or enforcement of the award.
2. Proper notice is information likely to bring the relevant matter to the notified person’s attention. The question is factual. The court must take account of the parties’ contractual dispute-resolution mechanism and applicable institutional arbitration rules. The burden rests on the party resisting enforcement.
3. The fact that communications received in England are in a language other than English does not itself invalidate notice. Language may be decisive in an appropriate case, but the assessment depends on the circumstances.
4. Here, the contract expressly provided for arbitration in Moscow through ICAC under Russian law, and the correspondence and dispute had a Russian connection. The covering letter was headed in English as coming from the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation. It was a short letter which could readily have been translated. Those matters made it reasonably clear that arbitration proceedings were being commenced and that action was required.
5. The same reasoning applied to the notices concerning appointment of arbitrators and the hearing. The defendant reasonably should have obtained translations. Its failure to do so did not establish lack of proper notice or a breach of natural justice.

The court accepted that the claimant and ICAC could have given more explicit warning, but held that the importance of responding to the notifications was obvious on the facts. Consequential matters were left to be dealt with after judgment.

The judgment records that Males J, by order dated 16 January 2017, granted leave to enforce the award and entered judgment under Arbitration Act 1996, s 101. The defendant’s application to set that order aside was dismissed by Blair J.