A v B (Rev 1)

A court hearing an application under Arbitration Act 1996, section 66, may determine factual and legal issues which would constitute defences to an action on an award, particularly where the tribunal is functus officio. A consent award is construed as a contract against its contractual and commercial background. Entire agreement and no oral modification clauses may prevent reliance on alleged additional terms or oral variations. Repeated indulgence of late payment does not itself waive contractual acceleration rights. Clear contractual acceleration provisions are applied according to their terms, and estoppel requires a sufficiently clear representation, reliance and inequity.

The claimant sought enforcement under section 66 of the Arbitration Act 1996 of a consent award arising from the settlement of earlier LCIA arbitrations. An earlier enforcement order had been set aside by Moulder J in A v B [2020] EWHC 952 (Comm), and the matter was directed to a hearing concerning whether the payment conditions in the award had been satisfied.

The defendant argued that payment was not yet due, that contractual acceleration provisions had not been triggered, and that later agreements, waiver or estoppel prevented enforcement. The central issues were the court’s jurisdiction to resolve those matters under section 66, the construction and contractual effect of the consent award, and whether the alleged subsequent agreements or common understandings had legal effect.

1. Jurisdiction under section 66. The court had jurisdiction to determine disputes concerning whether conditions in a final award had occurred, whether the award had been varied, and whether subsequent events constituted a defence to enforcement. The tribunal was functus officio. The court’s power was consistent with the approach in Sovarex S.A v Romero Alvarez S.A [2011] EWHC 1661 (Comm) and with the procedural powers under CPR Part 62.
2. Construction and contractual effect. The consent award was to be construed as a contract, objectively and against the background of the 2018 Settlement Agreement. The contractual promises concerning entire agreement, no oral modification and waiver applied to attempts to resist enforcement of obligations recorded in the award. An alleged oral variation was therefore ineffective, and an alleged additional term inconsistent with the written settlement could not be relied upon.
3. Payment default. The claimant was required to nominate a payment account at least 10 business days before payment. The 1 October 2019 instalment consequently fell due on 7 October. However, it was still paid late and nearly $10,000 short. Previous acceptance of late payments did not establish waiver or an agreement by conduct preventing future acceleration. Nor was there an agreement excusing delay caused by banking or KYC difficulties.
4. Acceleration event. Paragraph 3.5 was clear. An acceleration event occurred if payment was made by or on behalf of E Co, or received by or on behalf of F Co, in respect of the Partial Award, and the amount exceeded the Principal Amount. Payment to F Co’s lawyers for application to F Co’s creditors satisfied the alternative contractual wording. Payment to G Co was not an additional condition, and no such condition could be implied.
5. Estoppel and alleged October agreements. No agreement or unequivocal assurance was reached at the 4 or 11 October meetings that the claimant would refrain from enforcing his rights. The alleged variation lacked consideration and was barred by the no oral modification clause. The alleged estoppels also failed for want of a clear representation, reliance and inequity. The reasoning in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2018] UKSC 24 supported the conclusion that informal promises could not circumvent the agreed requirement for formal variation.
6. Disposition. The claimant was entitled to enforce the consent award under section 66 and obtain judgment for the outstanding Principal Sum and Accrued Interest. The amount outstanding was to be agreed as at the date of hand-down.

The judgment records an earlier enforcement order made by Teare J on 17 October 2019. That order was set aside by Moulder J in A v B [2020] EWHC 952 (Comm), and the present hearing determined the disputed enforcement issues.