Sections 100-103 of the Arbitration Act 1996 give effect to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the NYC). Where a party seeks to have the award recognised or enforced, that party must seek the permission of the court under section 101(2) of the 1996 act. In doing so, an application must be made to the High Court pursuant to Civil Procedure Rule 62.18(6).

Such an application must be supported by written evidence. The documentary evidence which is required to be produced is set out in section 102 of the 1996 act.

Section 102(1)(a) requires the production of an authenticated original or a duly certified copy of the award and section 102(1)(b) also requires the original arbitration agreement or a duly certified copy of it. In the event that the award or arbitration agreements are in a foreign language, then section 102(2) requires that a certified translation be provided.

But what is meant by ‘certification’ of the arbitration agreement for the purposes of section 102(1)(b)? Guidance on this important procedural issue was provided by the Court of Appeal in Lombard-Knight v Rainstorm Pictures [2014] EWCA Civ 356.

Facts and High Court decision

Rainstorm was successful in showing that there was an arbitration agreement between it and Lombard-Knight who was ordered to pay over $28m. The arbitration award was made by the Judicial Arbitration and Mediation Service (JAMS), Los Angeles, California. Subsequently, Rainstorm applied to the English Commercial Court to enforce the award against Lombard-Knight.

In an attempt to comply with the procedural requirements under section 102 of the 1996 act, Rainstorm attached photocopies of the arbitration agreement to its claim form, along with a separate document entitled ‘certification of award’ which had been signed by a senior member of JAMS and which certified that this was a true and correct copy of the award. The claim form was supported by a statement of truth.

Rainstorm was, on the paper application, initially granted permission to enforce the award. However, Lombard-Knight appealed and the matter came before Cooke J. Lombard-Knight argued that Rainstorm had failed to comply with its obligations under section 102 of the 1996 act in that it had not produced the original arbitration agreement or a certified copy.

Allowing the appeal, Cooke J held that producing a copy of the agreement with a statement of truth was not sufficient for the purposes of the 1996 act and therefore this did not constitute valid certification.

Cooke J reasoned that the formalities under section 102 of the 1996 act must be strictly complied with so there is no doubt as to the validity of the arbitration agreement. He also went on to explain that there must also be independent certification of authenticity of copies as compared with originals. Rainstorm appealed to the Court of Appeal.

Court of Appeal decision

Tomlinson LJ (pictured), giving the leading judgment of the court, disagreed with Cooke J’s interpretation and application of section 102. Tomlinson LJ held that the statement of truth which accompanied the arbitration agreement proved that the copies were ‘duly certified’ copies of the original and this was sufficient for the purposes of section 102 of the 1996 act. Further, there was no requirement for ‘independent’ certification and Cooke J had been wrong to look for such verification.

This further requirement would, Tomlinson LJ explained, introduce an ‘unnecessary element of formalism’. As his lordship stated: ‘[The arbitration process] is intended to promote enforcement, not to put meaningless and purposeless hurdles in the way.’

Cooke J was also wrong to focus upon the validity of the arbitration agreement. According to Tomlinson LJ, the certification of the copy of the arbitration agreement does not go to the validity of the arbitration agreement itself. The validity of the arbitration agreement, as confirmed by Mance LJ in Dardana Ltd v Yukos Oil Company [2002] 1 All ER Comm 819, is only relevant under section 103(2) of the 1996 act and this was a matter for the party resisting recognition and enforcement to raise.

Finally, Tomlinson LJ found Cooke J to be wrong in introducing the concept of ‘authenticity’ when considering the arbitration agreement. Section 102(1)(b) required that an original or certified copy of the arbitration agreement be produced. The process of certification was the process by which the copy is attested to be a true copy of the original whereas authentication concerned the formality by which the signature on the document is attested to be genuine.

The Court of Appeal’s decision in Rainstorm further reinforces the pro-enforcement nature of the NYC and the obligation on national courts to (subject to any valid grounds of refusal) recognise and enforce foreign arbitral awards. As a consequence, the NYC protects and upholds the institution of international commercial arbitration.

It reassures international commercial businesses which engage in sophisticated and high-value cross-border transactions that they will be able to enforce or seek recognition of foreign arbitral awards without becoming entangled in complex, lengthy and expensive domestic court procedures.

It is for these reasons that the Court of Appeal decision is to be welcomed. The decision of Cook J appeared to go beyond the simple procedural requirements of section 102 and had the danger of placing unnecessary obstacles in the way of a party seeking to enforce a valid arbitral award and undermining the policy rationale which underpins the NYC.

Michael Charalambous (LLB (Hons)) co-authored this article