INTERNATIONAL ARBITRATION 1/3LY
ALLEGAT IONS OF BRIBERY & CORRUPT ION – C AN THE Y DERA IL AN ARBI TRAT ION?
2014 saw a number of challenges to the enforcement of arbitration awards on the basis that the arbitral proceedings and, in some cases, the underlying agreements were tainted by bribery and corruption. Given the negative impact of corruption on international trade and commerce and the fact that there is no express reference to bribery and corruption in the New York Convention or UNCITRAL Model Law, challenges to enforcement based on bribery and corruption are inevitably brought on the basis that enforcement will offend international and/or domestic public policy. Whilst the approach may differ depending on which national court has to consider the issue, three recent cases decided in London, Paris and Singapore have demonstrated a similar and consistent approach by those separate courts when a party seeks to resist enforcement by making accusations of bribery, fraud or corruption. This is also consistent with two 2013 decisions of the US Courts of Appeal 2nd and 6th Circuits. E VIDENCE OF FRAUD SHOULD BE DEPLOYED DURING THE ARBITRATION (Honeywell vMeydan Group 1 ) A contractual dispute arose between the parties whenMeydan Group ceased payments to Honeywell in respect of services carried out at theMeydan racecourse in Dubai. In accordance with the arbitration clause in the contract, Honeywell commenced arbitral proceedings in Dubai under the Dubai International Arbitration Centre (DIAC) Rules. Meydan refused to participate in the arbitration and an awardwasmade in Honeywell’s favour in the sumof AED 73million (circa USD 20million). Honeywell commenced enforcement proceedings in Dubai and the Dubai Court of First Instance recognised and ordered enforcement of the award. Meydan appealed and enforcement was stayed pending an appeal. Honeywell sought to enforce the award in Englandwhere the High Court gave leave to enforce the award in the samemanner as a judgment. In response, Meydanmade an application in the English Technology and Construction Court to set aside the order ratifying the award. Justice Ramsay directed that Meydan’s applicationwould be determined on a summary basis and the usual test was to be applied, namelywas there any real prospect of establishing a ground under section 103 of the Arbitration Act 1996which deals with refusal of recognition or enforcement of an award. Meydan raised several objections to enforcement, the ones relevant to this article being: • The awardwas not valid under UAE lawbecause it resulted froma contract procured by bribing public servants in Dubai • Enforcement of the awardwould be contrary to public policy in England andWales as the award represented property that had been obtained through unlawful conduct, namely bribery
BY PAUL HUGHES, A SSOCIATE AT CLYDE & CO
1 [2014] EWHC 1344 (TCC) 2 Cass.Civ. 1ère, 12 février 2014, no 10-17.076
3 Paris CA, Pôle 1, Ch.1, 4 March 2014 4 Paris CA Pôle 1, Ch. 1, 14 October 2014 5 Paris CA Pôle 1, Ch. 1, 4 November 2014 6 [2014] 1 SLR 814 7 China International Economic and Trade Arbitration Commission
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