Enforcement Of Foreign Arbitral Awards In Bermuda

Chief Justice underlines the jurisdiction's pro-enforcement stance in notable recent judgment

What has happened?

In a judgment handed down on 3 September 2019 in the case of Cat.SA v Priosma Limited¹, the Bermuda Supreme Court:

refused an application by the Bermuda based Priosma Limited (Priosma or Award Debtor) to set aside an ex parte order granting Cat.SA (CAT or Award Creditor) leave to enforce a foreign arbitral award rendered in an arbitration seated in Paris (Set Aside Application); granted Priosma's application for a stay of enforcement in Bermuda pending the outcome of an appeal by Priosma against the award to France's highest appellate court (Stay Order); but as a condition of the Stay Order, ordered Priosma to provide security for the full amount of damages and costs awarded to CAT by the three-member tribunal in Paris. Why is the case noteworthy?

The judgment once again confirms Bermuda's status as a sophisticated, arbitration-friendly jurisdiction. It serves as a classic example of the robust approach taken by the Bermuda courts when asked to enforce foreign arbitral awards against award debtors in Bermuda, even in circumstances where the award in question is being challenged by the award debtor in the courts of the "seat", or legal place, of the arbitration.

The judgment of the Chief Justice of Bermuda, Mr Narinder Hargun, expressly states that the decision is "consistent with the pro-enforcement policy" of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention), which was given legal effect in Bermuda in 1979, as well as the Bermuda International Conciliation and Arbitration Act 1993 (1993 Act), which incorporates the UNICITRAL Model Law into Bermuda law.

On a more technical level:

The judgment stands as good authority for the principle that, pursuant to the legal doctrine of issue estoppel, the Bermuda courts will not allow an award debtor to re-litigate arguments in support of non-enforcement of a foreign award if those arguments have already been made before, and rejected by, the supervisory courts of the arbitration The judgment makes it clear that even if award debtors are successful in persuading the Bermuda courts to stay enforcement pending a legal challenge in the courts of the foreign seat, there is nevertheless a real possibility that the award debtor may be required, depending on the circumstances, to provide security as a condition of any order...