Jurisdiction(s):
United Kingdom

England and Wales Court of Appeal refuses recognition of Spanish judgment conflicting with arbitral awards; injunction/declaration only for non-party obligation; equitable compensation set aside; state immunity bars injunctions

Published on: 10 January 2025

Published by a LexisNexis Arbitration expert

Legal News

Article summary

The Kingdom of Spain v The London Steam-Ship Owners’ Mutual Insurance Association Ltd and The French State v The London Steam-Ship Owners’ Mutual Insurance Association Ltd [2024] EWCA Civ 1536 What are the practical implications of this case?

The Court of Appeal’s ruling makes clear, as a matter of principle, that English public policy bars recognition and enforcement in England of foreign judgments that cannot be reconciled with arbitral awards. That said, where a contradictory judgment is to be enforced overseas, the court and arbitrators have generally circumscribed powers to restrain such steps in practice in ‘conditional benefit’ scenarios. Under the conditional benefit principle, a non‑contractual party invoking rights under a contract that includes an arbitration clause bears an equitable obligation to pursue its claim in arbitration to the exclusion of other fora. Although the rule is settled, the relief for breaching that duty had previously been uncertain. The CA confirms that appropriate relief comprises an injunction or a declaration. Where an injunction cannot be granted due to State immunity, an award of equitable damages in substitution is simply unavailable...

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