UK: West Tankers Revisited (2): Enforcement Of Declaratory Awards Confirmed

Last Updated: 7 February 2012
Article by Guy Pendell and Juliette Huard-Bourgois

An important decision in support of international arbitration has confirmed that a party which has agreed to arbitrate in England can ask the English courts to enforce the arbitrators' award for a declaration of non-liability, despite earlier court proceedings started in another Member State.

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An important decision in support of international arbitration has confirmed that a party which has agreed to arbitrate in England can ask the English courts to enforce the arbitrators' award for a declaration of non-liability, despite earlier court proceedings started in another Member State.

Following the Commercial Court, the Court of Appeal has recently confirmed in West Tankers Inc v Allianz SPA & Anr [2012] EWCA Civ 27, that declaratory awards can be enforced in the same manner as a judgment. A judgment can, therefore, be entered in terms of that award pursuant to section 66(1-2) of the Arbitration Act 1996 (the "Act"). (Read our Law-Now on the commercial court decision here).

This decision arises out the West Tankers shipping insurance dispute which has already given rise to one of the most important decisions of the European Court of Justice on the interaction of the Brussels I Regulation and arbitration.

The underlying dispute was between the insurers of charterers of a vessel (Allianz) and the vessel's owners (West Tankers) about responsibility for a collision of the vessel against a jetty owned by charterers in Italy during the voyage charter.

After arbitration had been started in England pursuant to the arbitration agreement on the charterparty, Allianz started substantive court proceedings in Italy. West Tankers obtained an anti-suit injunction from the English courts preventing the insurers from prosecuting their claim in Italy, but that injunction was set aside following the ECJ ruling (read our Law-Now here).

In England the arbitrators rendered a declaratory award stating that West Tankers were under no liability to the charterers' insurers in respect of the collision.

In order to prevent the possibility that a contrary Italian judgment could be enforced in England on the same matter, West Tankers applied and obtained an order giving leave from the court for the award to be enforced in the same manner as a judgment pursuant to section 66 of the Act. Allianz's appealed against the order and argued that a normal interpretation of section 66 should exclude declaratory awards from its scope.

Finding that the appeal turned upon a pure question of construction of a domestic statute, Lord Justice Toulson explained that "it is not a question with a distinctively European flavour". Further, he rejected the appellant's narrow interpretation of section 66 of the Act by which "enforced" should normally apply to awards which were coercive in form, i.e. apply only to awards which ordered a party to do or not to do something. Toulson LJ preferred to adopt a broader interpretation which is "closer to the purpose of the Act and makes better sense in the context of the way in which arbitration works". He found that section 66 does not only envisage enforcement by one of the normal forms of execution of a judgment but may include instead other means of giving judicial force to the award, on the same footing as a judgment, like issue estoppel or res judicata.

This decision confirms the equal footing of arbitral awards with court decisions: if a declaratory judgment of negative declaration can have an effect, so can such declaratory awards.

This decision also endorses the approach adopted by the Commercial Court in African Fertilizers and Chemicals Nig Ltd (Nigeria) v BD Shipsnavo GmbH & Co Reederei Kg [2011] EWHC 2452 (Comm) (which is itself subject to appeal) and shows that the courts are willing to establish the primacy of contractual arbitration over irreconcilable court proceedings thereby granting to a successful party the "material benefit" of an award.

In West Tankers the appellants did not pursue the argument that, should the Italian courts decide in favour of the insurers, this may result in contrary judgments on the same matter emanating from courts of two Member States of the European Union. Such a situation is likely to contradict the objectives of the Brussels Regulation and will raise the question of whether a judgment entered in the form of an award falls, or does not fall, within the scope of the Brussels I Regulation. One can therefore reasonably expect another episode of the West Tankers saga entertaining the English courts, and possibly the ECJ, on the question of the enforcement of the Italian judgment despite the declaratory award and its implication in the Brussels regime.

Further reading:

West Tankers Inc v Allianz SPA & Anor [2012] EWCA Civ 27 (24 January 2012)

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 01/02/2012.

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