Enforcing a declaratory award


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The Commercial Court has confirmed that declaratory arbitration awards may be enforced by the court under section 66 of the Arbitration Act 1996, where there is a reasonable prospect of the award creditor establishing the primacy of the award over an inconsistent judgment.

In West Tankers v Allianz SpA [2011] EWHC 829 (Comm) there was a London arbitration and, in breach of the arbitration clause, the defendant commenced parallel proceedings in the Italian courts. The English court granted an anti-suit injunction restraining the pursuit of the Italian proceedings, but the European Court of Justice held that that was in breach of the Brussels Regulation. The anti-suit injunction was discharged and the Italian proceedings continued.

By taking the novel step of applying for an English court judgment to confirm the declaratory arbitration award, the claimant would be able to rely on Article 34(3) of the Brussels Regulation which precludes the enforcement of a judgment of another European State if it is "irreconcilable with a judgment given in a dispute between the same parties in a Member State in which recognition is sought".

The court held that it was free to enforce a declaratory award if to do so would make a positive contribution to securing the material benefit of the award.

Comment: This is a convenient device to overcome the problem caused by the prohibition on inter-European anti-suit injunctions for breach of arbitration agreements.

Paul Howcroft, partner, Fladgate LLP (phowcroft@fladgate.com)

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