Shell Energy Europe Ltd v Meta Energia SPA

A party that voluntarily withdraws from an arbitration cannot establish procedural unfairness merely because it later lacks representation at the hearing, where it had a fair and ample opportunity to present its case. Leave under Arbitration Act 1996, s.66 may properly be granted where enforcement within the jurisdiction remains possible or where confirmation by the court of the seat has inherent value for enforcement in another New York Convention state. No assets need be shown within the jurisdiction before leave is granted to enforce an award as a judgment.

Meta Energia SpA applied to set aside an order made by Teare J under s.66 of the Arbitration Act 1996. The order granted Shell Energy Europe Ltd leave to enforce as a judgment, and to enter judgment in the terms of, a London-seated LCIA arbitration award for approximately €20 million.

Meta had dismissed its original legal team shortly before the final hearing. After an adjournment, its new solicitors attended only to assert that Meta could not present its case and then withdrew. The arbitrators proceeded after considering the circumstances and giving Meta a further opportunity to comment on the transcript. Meta did not challenge the award under s.68. It resisted enforcement in Italy under Article V.1(b) of the New York Convention.

The issues were whether there was any procedural unfairness affecting enforcement and whether there was sufficient utility or other justification for the English court to grant or maintain s.66 relief.

1. The application was dismissed. Teare J’s order under s.66 of the Arbitration Act 1996 was confirmed.
2. Meta had not been unable, or lacked entitlement, to present its case. It had participated fully until it dismissed its lawyers, obtained an adjournment, and had realistic alternatives, including junior counsel, co-counsel, or representation by its solicitors. The arbitrators acted fairly and gave Meta a further opportunity to engage with the merits. There was therefore no arguable basis for a s.68 challenge based on procedural unfairness. (paras 4–11)
3. Assuming, in Meta’s favour, that a due-process complaint could be raised as a discretionary reason against enforcement under s.66 despite the absence of a s.68 challenge, the circumstances plainly justified leave. There remained a possibility of useful enforcement action in England. In addition, confirmation by the court of the seat that the award was valid, effective and enforceable had inherent value in enforcement proceedings in another New York Convention state. The judge declined to follow any contrary suggestion in Nomihold Securities Ltd v Mobile Telesystems Finance SA [2011] EWHC 2143 (Comm) at [47], while distinguishing that case on its facts. (paras 16–18)
4. The judge agreed with Nomihold Securities Ltd v Mobile Telesystems Finance SA at [23], relying also on Rosseel NV v Oriental Commercial and Shipping Co UK Ltd [1991] 2 Lloyd’s Rep 625 at 629, that assets within the jurisdiction need not be shown before leave is granted to enforce an incoming New York Convention award. A fortiori, no such requirement applied to leave under s.66 for an award made in an arbitration seated in England. (para 17)
5. The technical issue under Italian law concerning immediate enforcement did not justify setting aside the order. The alleged non-disclosure was immaterial, and the same relief would in any event have been granted on the full facts. (para 13)

The judgment was a first-instance decision on Meta Energia SpA’s application to set aside an order made by Teare J on 7 May 2020 under s.66 of the Arbitration Act 1996. The order was confirmed.