Issue Esptopel Principle – A Ground for Refusing to Enforce An International Arbitral Award?
Introduction to the issue
The recent UK High Court case of iag Human SE v The Czech Repblic [2014] EWHC 1639 (Comm) has sparked interest and debate in the international arbitration community over Issue Esptopel. In that case, the High Court ruled that enforcement of an international arbitral award on an application under the New York Convention should be refused. The reason for the refusal was that when the applicant for enforcement had previously made the same application for enforcement under the New York Convention in Australia, the Supreme Court of Australia had ruled that the arbitral award was not yet binding, and therefore, under the common law principles of Re Judicata and Issue Esptopel, the court would not rehear the issue again. Therefore, according to the common law principles of Re Judicata and Issue Esptopel, the court would not hear the issue again and refused to enforce the judgement.
The New York Convention specifies five grounds for a Contracting State to refuse to enforce an international arbitral award, but has Issue Esptopel become the sixth ground?
Concerns about the Issue Esptopel Principle
The judgement of the English High Court raises at least the following concerns:
- Departure from the principle of party autonomy. The principle of party autonomy establishes that the courts of the place of arbitration are to be the supervisory courts for arbitral awards. If, in accordance with the principle of estoppel, the successful party of an arbitral award can arbitrarily choose a State Party to the New York Convention to make the first application for enforcement, and then when other States Parties make enforcement applications, the other States Parties will follow the decision made by the court at the place of the first application for enforcement, then is it not true that the court at the place of the first application for enforcement of an arbitral award will be the court to supervise the decision as to whether or not the arbitral award is enforceable? The court where the first application for enforcement of the arbitral award is made is not chosen by mutual consent of the parties.
- If the judgement of the court of the first enforcement application is obviously wrong or unreasonable, should the court of the subsequent enforcement application follow in accordance with the principle of estoppel?
- Will a party be encouraged to adopt the tactic of finding a small, remote country with an unsound legal system, obtaining a favourable enforcement judgment from the court by some means, and then applying for enforcement in the United Kingdom and other countries so that they can follow the judgment?
Read the full article at Issue Estoppel: The Sixth Ground for Refusing to Enforce an International Arbitral Award.
(Bob Yan, principal solicitor of Yan Lawyers, solicitors. Email: [email protected], Tel: +852 31881995, +86 15018939249, WhatsApp: +852 5103 9249)