Court of Appeal confirms pro-enforcement policy towards arbitration awards, even where there has been attempted fraud

24/04/18

The Court of Appeal has handed down its judgment in an appeal concerning the public policy exception to the enforcement of arbitral awards where the award is said to be tainted by fraud. The issue has not been considered by the Court of Appeal since its landmark decision in Westacre.

In RBRG Trading (UK) Limited v Sinocore International Co Limited [2018] EWCA Civ 838 Hamblen LJ, giving the Court’s judgment, held that a Chinese CIETAC award could be enforced in England even though the arbitrators reached a finding that the enforcing party, Sinocore, had behaved fraudulently by attempting to extract payment from RBRG through forged bills of lading. In reaching this conclusion, Hamblen LJ held that, whilst the Supreme Court’s decision in Patel v Mirza may have moved the law on the illegality defence closer to the approach to be applied under section 103 of the 1996 Act, the two areas of law had not merged. He also held that it was relevant that Sinocore had been caught out attempting to defraud RBRG’s bank, which had refused to pay against the forged bills of lading, and that it had therefore at most engaged in “attempted fraud”.

The Court of Appeal’s judgment reinforces the English courts’ strong policy of supporting and enforcing foreign arbitral awards, even where a party has behaved fraudulently.

The judgment has been reported by the legal press e.g. here.

The judgment appears here.