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

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...