Diag Human Se v Czech Republic
2014
COMMERCIAL COURT
United Kingdom
CORAM
- MR JUSTICE EDER
Areas of Law
- Arbitration Law
- Contract Law
- Civil Procedure
2014
COMMERCIAL COURT
United Kingdom
CORAM
AI Generated Summary
The case involved Diag Human's attempt to enforce an August 4, 2008, Czech arbitration award against the Czech Republic under Section 103 of the Arbitration Act 1996. The Czech Republic challenged the award's enforcement, arguing it was non-binding, a contention supported by the Austrian Supreme Court's 2013 decision, which raised an issue estoppel. The Court found that the award was not binding under Section 103(2)(f) of the Arbitration Act 1996, based on the ongoing review process constituting 'ordinary recourse.' Additionally, the Court confirmed that the Austrian decision created an issue estoppel. Consequently, the enforcement order was set aside, and Diag Human's application for partial enforcement was dismissed.
Judgment
Mr Justice Eder:
Introduction
These proceedings concern a claim by the claimant (“Diag Human”) to enforce an Arbitration Award dated 4 August 2008 made in its favour in the Czech Republic against the defendant, the Czech Republic (the “Award”).
The claim is made pursuant to s103 of the Arbitration Act 1996 (the “1996 Act”) which provides in material part as follows:
“ 103(1) Recognition or enforcement of a New York Convention award shall not be refused except in the following cases.
(2) Recognition or enforcement of the award may be refused if the person against whom it is invoked proves –
…
(f) that the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made
(3) Recognition or enforcement of the award may also be refused if the award is in respect of a matter which is not capable of settlement by arbitration, or if it would be contrary to public policy to recognise or enforce the award.
(4) …
(5) Where an application for the setting aside or suspension of the award has been made to such a competent authority as is mentioned in subsection (2)(f), the court before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the recognition or enforcement of the award.
It may also on the application of the party claiming recognition or enforcement of the award order the other party to give suitable security. ”
The reference in s103(1) is to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted by the United Nations Conference on International Commercial Arbitration on 10 June 1958 (the “New York Convention” or “Convention”). The wording in s103(1) and (2)(f) (which is the main focus of the present dispute) reflects the wording of Article V(1)(e) of the Convention which provides:
“ Article V
(1) Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that:
…
(e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made. ”
It is common ground that the Czech Republic is a party to the Convention; and that therefore the Award is a New York Convention award within