Jurisdiction(s):
United Kingdom

O v C: Section 44 Arbitration Act 1996—payment into court ordered; no real OFAC prosecution risk; balancing test for foreign law objections

Published on: 19 November 2024

Published by a LexisNexis Arbitration expert

Legal News

Article summary

O v C [2024] EWHC 2838 (Comm)

What are the practical implications of this case?

The decision sets out how the court should proceed on a section 44 application where the relief sought could expose a party to prosecution abroad. It underlines that, while the court will be slow to grant such relief, it retains power to do so, and may make an order in appropriate circumstances. In exercising its discretionary power, the court must balance the prospect of criminal proceedings against the significance of the remedy requested; the court’s task is to weigh the risk of prosecution alongside the importance of the relief. A party invoking a foreign criminal regime must prove not merely that such a law exists, but that there is a genuine, non-theoretical risk of prosecution.

What was the background?

The arbitration concerns a shipment of naphtha carried on a vessel drifting in the South China Sea. The consignment was taken on board on 9 February 2023; almost immediately thereafter the charterers (‘C’) were placed under sanctions by the US Office of Foreign Assets Control (‘OFAC’)...

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