Alexander Brothers Ltd (Hong Kong SAR) v Alstom Transport SA & Anor

Enforcement of a New York Convention award will ordinarily not be reopened to reconsider an illegality or bribery issue within the jurisdiction of the chosen arbitral tribunal. The court must identify the true issue decided, including any materially different standard of proof. A party that could and should have raised the point in the arbitration will generally be barred from raising it at enforcement, subject to special circumstances causing injustice.

The public policy exception in section 103(3) of the Arbitration Act 1996 is restrictive. General opposition to corruption does not establish an applicable mandatory rule of EU law. A foreign enforcement judgment will create issue estoppel only where the same issue was finally determined on the merits.

Alexander Brothers Ltd obtained an ICC award requiring Alstom Transport SA and Alstom Network UK Limited to pay sums due under Swiss-law consultancy agreements concerning railway contracts in China.

Teare J granted an order enforcing the award without notice. Alstom applied to set that order aside, relying on section 103(3) of the Arbitration Act 1996 and alleged bribery in the performance of the agreements. It also alleged inadequate disclosure on the without notice application. Alstom relied on the arbitral proceedings, a failed challenge before the Swiss supervisory court, and a French Court of Appeal decision refusing enforcement on the basis of indicia of bribery. The central issues were whether the bribery case had been decided in the arbitration, whether it could be raised for the first time at enforcement, whether the French decision created issue estoppel, and whether disclosure had been sufficient.

1. Application dismissed. The application to set aside the enforcement order failed both on public policy grounds and for alleged lack of full and frank disclosure.
2. The general rule is that where an arbitral tribunal had jurisdiction to determine illegality and determined that there was no illegality on the facts, the English enforcement court will not reopen the issue except in exceptional circumstances. That rule reflects the strong public policy favouring finality and enforcement of international awards. It usually removes the need for a detailed case-specific balancing exercise. The court applied the principles stated in Carpatsky Petroleum Corp v PJSC Ukrnafta [2018] EWHC 2516 (Comm), RBRG Trading v Sinocore [2018] EWCA Civ 838 and related authorities.
3. The tribunal had considered whether Swiss law afforded a defence based on corruption and had found that the evidence did not meet the high Swiss standard of proof. It had not, however, determined the positive factual issue whether bribery had occurred. The issue before the tribunal concerned the legal effect of suspicions and evidence on payment obligations. The witnesses had not been cross-examined on a positive bribery case. A materially different question and standard of proof meant that there was no true identity of issue.
4. Alstom could and should have advanced a properly formulated bribery case in the arbitration. Its decision to reserve the point for enforcement, without explaining why it was pointless to raise it under Swiss law, was abusive under the broad, merits-based principles derived from Henderson v Henderson (1843) 3 Hare 100 and Johnson v Gore Wood [2002] 2 AC 1. The seriousness of the allegation, the evidence, and the distinction between a contract to bribe and a contract allegedly procured or performed by bribery did not amount to special circumstances.
5. The EU-law argument failed because Alstom identified no applicable mandatory EU rule or EU public policy requiring refusal of enforcement. The anti-corruption instruments relied on did not establish such a rule. The approach in Eco Swiss China Time Ltd v Benetton International NV Case C-126/97 and Claro v Cenro Movil Milenium SA Case C-168/05 was therefore not engaged.
6. The French Court of Appeal’s decision did not create issue estoppel. Its indicia-based public policy test did not clearly establish a final factual determination, on the merits, that bribery had occurred. The French and English enforcement questions were not shown to be identical.
7. The statement that Alstom had not complied with the award in any respect was inaccurate in isolation. However, the witness statement as a whole disclosed the French proceedings, the seizure and freezing of the funds, and the relevant refusal of enforcement. By a narrow margin, there was no breach of the duty of full and frank disclosure.

• ICC arbitration: The tribunal made an award in favour of Alexander Brothers Ltd under Swiss-law consultancy agreements.
• Swiss Federal Court: The challenge to the award, including the public policy challenge, was rejected.
• Paris Cour d’Appel: Enforcement was refused on the basis of serious, precise and consistent indicia of bribery. The decision was under appeal to the Cour de Cassation.
• High Court (Commercial Court): Teare J made an enforcement order without notice. Mrs Justice Cockerill dismissed Alstom’s application to set it aside.