Ominum De Traitement et de Valorisation SA v. Hilmarton Ltd.
(England and Wales) High Court of Justice (Commercial Court), Walker J., 24th May 1999.
International arbitration - whether enforcement of award could be resisted on grounds of public policy - award by foreign arbitral tribunal enforcing contract whose performance was contrary to domestic public policy in its place of performance, but not contrary to the domestic public policy of either the country of the proper law and/or the curial law - whether award was contrary to English public policy.
Facts:
The parties concluded an agreement under which the Hilmarton Ltd ("Hilmarton") was appointed as the legal and tax consultant to provide administration and co-ordination services in respect of a contract for drainage works for the town of Algiers. The conditions for the payment of fees by Ominum De Traitement et de Valorisation SA ("Ominum") in respect of these services was the awarding of the contract by the City of Algiers to Ominum. The agreement was expressly stated to be governed by Swiss Law and provided for ICC Arbitration in Geneva.
Disputes arose and Hilmarton commenced arbitration to recover the unpaid balance of its fees. The arbitration was conducted before a sole arbitrator who heard oral evidence, but who subsequently resigned after his decision has been reversed by the Swiss Court. A new sole arbitrator was appointed. Having correctly directed that, as a matter of Swiss Law he was bound by the opinions of the Swiss court, he completed the proceedings and published an award allowing Hilmarton's claim. In doing so, he rejected Ominum's contention that the claim should be dismissed because the agreement was contrary to a mandatory law of Algeria, the place of performance of the contract. The arbitrator's conclusion being that although, by approaching public servants and Algerian Government officials to obtain the contract, Hilmarton had "wittingly" breached an Algerian statute, this activity did not involve bribery or other similar corrupt activity.
Ominum applied to set aside an ex parte order, obtained
by Hilmarton under s. 103 of the Arbitration Act 1996, to enforce the award in England, on the ground that enforcement was contrary to public policy.
Held:
Ominum's application would be dismissed. In order to decide whether enforcement in England should be refused as contrary to public policy, the relevant public policy was that of the
lex fori, England and Ominum had to establish not just the that the agreement was unlawful at the place of performance, but that this infected the award as well.
The first step was to evaluate the award itself. But this made clear that the arbitrator and, indeed the Swiss court, had made, in accordance with Swiss law, its own evaluation of the Algerian statute and, in the light of the finding that no corrupt activity was involved, had refused to admit any illegality or public policy defence to the claim. Thus, the same point now put forward by Ominum had been ruled upon on the face of the Award and rejected by application of the law chosen by the parties and on the basis of a finding of fact that no corrupt practices were involved.
While it might be that an English arbitral tribunal would have reached a different conclusion, the court was not adjudicating on the underlying contract, but on whether or not the award should be enforced in England.
The Court of Appeal had concluded in Westacre Investments v. Jugoimport (unreported) that it was legitimate for a foreign tribunal to take the view that, albeit performance was contrary to domestic public policy in the place of a contract's performance, enforcement should be allowed since performance was not contrary to the domestic public policy either of the country of the proper law and/or the curial law. It has also concluded that this did not offend English public policy. In consequence, there were no grounds on which enforcement of this award could be refused.
For the Applicant: Mr Graham Dunning (instructed by Messrs Herbert Smith).
For the Respondent: Mr J Collins (instructed by Messrs Norton Rose).
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