Soleh Boneh International Ltd and Another v Government of the Republic of Uganda and Another
| Jurisdiction | England & Wales |
| Judgment Date | 12 March 1993 |
| Date | 12 March 1993 |
| Court | Court of Appeal (Civil Division) |
Before Lord Justice Neill, Lord Justice Staughton and Lord Justice Roch
Court of Appeal
Costs - order for security - arbitration proceedings
Where on an application for leave to enforce a foreign arbitration award in England under the Arbitration Act 1975, the court adjourned the proceedings pending the outcome of a legal challenge to the validity of the award in a foreign jurisdiction, an order for security for costs pursuant to section 5(5) of the Act should not be made automatically.
The Court of Appeal so stated allowing an appeal by the defendants, the Government of the Republic of Uganda and the National Housing Corporation, of Uganda, from the decision of Mr Michael Barnes, QC, who, sitting as a deputy judge of the Queen's Bench Division, had on January 13, 1992 ordered that the application of the plaintiffs, Soleh Boneh International Ltd, for leave to enforce a substantial arbitration award made in Sweden against the defendants, be adjourned pending the outcome of proceedings in the Swedish courts by the defendants to set aside the award.
He had also ordered the defendants to provide security in the sum of US$29,353 million which represented the total amount of the award of US$9.5 million plus interest.
Mr Michael Burton, QC, for the defendants; Mr Stanley Brodie, QC and Miss Monica Carss-Frisk for the plaintiffs.
LORD JUSTICE STAUGHTON said that two important factors had to be considered on an application for leave to enforce an award, although that did not mean that there might not be others.
The first was the strength of the argument that the award was invalid, as perceived on a brief consideration by the court which was asked to to enforce the award while proceedings to set it aside were pending elsewhere.
If the award was manifestly invalid, there should be an adjournment and no order for security; if it was manifestly valid, there should either be an order for immediate enforcement, or else an order for substantial security.
In between there would be various degrees of plausibility in the argument for invalidity and the judge had to be guided by his preliminary conclusion on the point.
The second point was that the court had to consider the ease or difficulty of enforcement of the award and whether it would be rendered more difficult, for example, by the movement of assets or by improvident trading...
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