CONSILIENT HEALTH LIMITED v GEDEON RICHTER PLC

When deciding whether to adjourn enforcement of an arbitration award under section 103(5) of the Arbitration Act 1996, the court has a broad discretion. It must assess all the circumstances, including the parties’ potential prejudice from immediate or delayed enforcement, any available security or undertakings, and the merits of the challenge. Mandatory or non-monetary relief does not require a different legal approach, although it may create different forms of prejudice. An appellate court will not interfere merely because the factual situation is novel or it would have weighed the factors differently. At a consequential hearing, the court should generally apply the principle of finality and refuse new arguments that could and should have been advanced at the original hearing. Where an adjournment effectively holds the ring pending foreign challenge proceedings, costs may properly be reserved.

This was a consequential hearing following the court’s substantive judgment adjourning the claimant’s application to enforce a New York Convention arbitration award pending challenge proceedings in Amsterdam. The parties disputed the wording of the order, including whether undertakings offered by the defendant should be included and whether the claimant’s proposed undertaking concerning registration dossiers should be added.

The court also considered costs of the adjournment application, the claimant’s draft grounds of appeal, and costs of the consequential hearing. The central issues were whether new protective relief could be raised at the consequential stage, how the discretion under section 103(5) of the Arbitration Act 1996 should be approached where the award required mandatory relief, and the appropriate costs orders.

1. The defendant’s undertakings were removed from the order because the claimant did not wish to receive their protection. The claimant could not, however, obtain a forensic advantage merely by deleting the undertakings without recording that appropriately worded undertakings could have provided some protection against prejudice caused by the adjournment.

2. The proposed undertaking concerning the registration dossiers was not entertained. Under the principle of finality, as discussed in AIC Limited v Federal Ports Authority of Nigeria [2022] UKSC 16, parties must bring available arguments before the court at the hearing. The principle applies to interlocutory hearings as well as trials and prevents a consequential hearing from becoming an opportunity to advance new, potentially difficult arguments about the territorial competence of the court.

3. The court confirmed that section 103(5) of the Arbitration Act 1996 confers a broad and unfettered discretion, exercised against the pro-enforcement philosophy of the New York Convention. The court must consider all the circumstances, the potential prejudice from immediate or delayed enforcement, available protective security or undertakings, and undertake a brief evaluative assessment of the challenge’s merits. The mandatory nature of the relief may affect the nature of the prejudice but does not displace those principles.

4. The proposed appeal grounds had no real prospect of success. An appellate court will interfere with a discretionary decision only for an error of principle, failure to take account of a relevant factor, a decision outside the ambit of discretion, or irrationality. Novelty of the factual situation, or disagreement about the weight given to factors, is insufficient.

5. Costs of the adjournment application were reserved. Applying the analogy identified in Wingfield Digby v Melford Capital Partners [2020] EWCA Civ 1647, the adjournment effectively held the ring pending the Amsterdam proceedings, and its ultimate justification could depend on the result of those proceedings. The costs of the consequential hearing were costs in the case because each party achieved partial success.

The judgment was a consequential hearing following the substantive judgment of 7 July 2022, reported as [2022] EWHC 1744 (Ch). The court refused permission to appeal because the proposed grounds had no real prospect of success.