Eastern European Engineering Ltd v Vijay Construction (Proprietary) Ltd

Enforcement of a New York Convention award may be refused under section 103 of the Arbitration Act 1996 only where the statutory ground is properly engaged and its requirements are established. A complaint about compliance with a pre-arbitration notice procedure does not concern the composition of the tribunal and cannot be brought under section 103(2)(e). A party is unable to present its case only where it was prevented by matters beyond its control, subject to exceptional circumstances, and it must show that the outcome might have been materially different. Public policy requires a high threshold and a causative link between the alleged misconduct and the award. Where the party chose not to call a witness and could not show that the evidence would have materially affected the result, a factual trial was unnecessary. Finality and respect for the supervisory court provide powerful additional considerations favouring enforcement.

Vijay Construction (Proprietary) Ltd applied under section 103 of the Arbitration Act 1996 to set aside an order made by Cooke J permitting Eastern European Engineering Ltd to enforce an ICC arbitration award.

The arbitration was seated in Paris. Vijay Construction had unsuccessfully challenged the award in the French supervisory courts on grounds concerning the contractual dispute notice, the admission of a further expert report and alleged interference with a witness. Related proceedings had also been brought in the Seychelles. The Seychellois Court of Appeal refused enforcement on a statutory ground without determining the substantive challenges.

The English application raised three remaining grounds: lack of jurisdiction or improper tribunal composition, inability to present the case, and public policy based on alleged witness interference. The central questions were whether those statutory grounds were engaged, whether the alleged procedural unfairness or misconduct was causative, and whether issue estoppel or the policy of finality should prevent renewed challenges.

1. Ground 1 failed. Section 103(2)(e) concerns the composition of the arbitral tribunal. A complaint that a party failed to comply with a pre-arbitration notice procedure does not fall within that provision. The alternative wording concerning arbitral procedure was directed to the arbitration itself, not pre-arbitration matters.
2. On the merits, the contractual wording required notification by either party, not reciprocal notification by both parties. The clause required a two-month waiting period, but did not make amicable settlement a condition precedent. Vijay Construction had itself served notices, the waiting period had been observed, and no prejudice was shown. The Seychelles Civil Code provision relied upon concerned a penalty clause and did not affect jurisdiction or tribunal composition.
3. Ground 2 failed. Under section 103(2)(c), the applicant had to show that it was prevented from presenting its case by matters beyond its control, or that exceptional circumstances justified intervention. It also had to demonstrate that the outcome might have been different. Vijay Construction had been given a reasonable opportunity to answer the third expert report, including responsive evidence, submissions and cross-examination. Its failure to use those opportunities was within its control. The report reduced, rather than increased, the damages awarded, and the liability findings rested on other evidence.
4. Ground 3 failed. Public policy under section 103(3) required a high threshold and a causal connection between the alleged witness interference and the award. Even assuming the alleged pressure could be proved, Vijay Construction had decided not to call the witness because it was uncertain whether his evidence would assist. There was no evidence that it had attempted to call him and been refused. Nor could it show that his skeletal evidence might have produced a materially different result. A trial of the disputed facts would therefore serve no useful purpose.
5. The court declined to make final findings on the alleged interference. The French decision created an issue estoppel on Ground 1 but not Ground 2. The policy favouring finality was engaged and would have weighed heavily against a further challenge if the merits had been less than compelling. The application to set aside the enforcement order was dismissed.

First-instance decision. The judgment records earlier proceedings in France and the Seychelles concerning the same arbitral award, but no appeal from the present decision.