In February 2011, Danish Polish Telecommunication Group I/S (the "Applicant") applied to the Irish High Court to have an arbitration award recognised and enforced in Ireland. The award was actually a Partial Award – in the amount of approximately €268 million - which has been granted in 2010 by an arbitral tribunal in Vienna against Telekomunikacja Polska SA (the "Respondent") in the context of a multi staged and ongoing arbitration.
By proceedings issued in the Commercial Court of Vienna, Austria on 2nd December, 2010 ("the Austrian Proceedings"), the Respondent sought to challenge the Partial Award in accordance with the UNCITRAL Arbitration Rules and applied for it to be set aside. It was on this basis that the Respondent resisted an application to have the Partial Award recognised and enforced in Ireland.
On 6 October 2011, upon application made by Arthur Cox acting on behalf of the Respondent, Ms Justice Finlay Geoghegan of the High Court granted an adjournment of the application for recognition and enforcement of the Partial Award, pending the outcome of the Austrian Proceedings.
Application to recognise and enforce
Article 35 Recognition and enforcement and Article 36 Grounds for refusing recognition or enforcement of the Model Law governed the issues determined on this application.
The Applicant submitted the following:
- that each of the grounds relied upon by the Respondent pursuant to Article 36(1) were without foundation;
- that the Court should refuse the application for adjournment pending the determination of the Austrian Proceedings. It submitted that the expert opinions of the Respondent's Austrian lawyers, when properly analysed, did not establish reasonable or substantial grounds in favour of the Respondent succeeding to set aside the Partial Award in the Austrian proceedings;
- that if the High Court were to exercise its discretion to adjourn its decision on recognition and enforcement pending a determination of the Austrian Proceedings, that it should:
- make an order for the recognition and enforcement of part of the Partial Award; and
- should make an order requiring the provision of security for costs.
The Respondent contended that the High Court should refuse the recognition and enforcement of the Partial Award under 36(i) and (iv) of the Model Law, or, in the alternative, that the High Court should exercise its power under Article 36(2) to adjourn the decision on recognition and enforcement of the Partial Award pending the determination the Austrian Proceedings.
The Respondent submitted that it was neither necessary nor appropriate for the High Court to determine questions of Austrian law in relation to the application for an adjournment under Article 36(2) but rather that the court need only be satisfied on the expert opinions adduced that there were reasonable or substantial grounds for contending that the Austrian Proceedings may succeed in having the Partial Award set aside by the Austrian courts.
The Court agreed with these submissions but declared that:
"A pro-enforcement construction of Article 36(2) of the UNCITRAL Model Rules suggests that the mere existence of proceedings seeking to set aside an arbitration award would not normally of itself constitute grounds for an adjournment."
Therefore the Court held that it must engage in a 'brief consideration' of the materials before it and then decide whether the Respondent has demonstrated that it had reasonable grounds or a seriously arguable case for the setting aside of the Partial Award in the Austrian Proceedings.
Following consideration, the High Court ordered that the application for recognition and enforcement be adjourned in full pending the outcome of the Austrian Proceedings. The High Court further ordered that the sum of €1.5 million be lodged by the Respondent with their solicitors pending the outcome of the Austrian Proceedings.
These proceedings were significant in circumstances where the Partial Award was simultaneously being sought to be recognised in various other jurisdictions. There is no appeal from a decision of the Irish High Court on recognition and enforcement. Consequently both parties were aware that a decision of the Irish High Court to enforce the Partial Award might have implications on their respective worldwide litigation strategies.
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