Court of Appeal requires payment of arbitration awards into Court as a condition of pursuing an appeal against enforcement action

28/11/13

Cruz City 1 Mauritius Holdings v. Unitech Ltd [2013] EWCA Civ 1512

Lady Justice Gloster has confirmed that where a party has obtained orders to assist with enforcement of arbitration awards, and an appeal is brought against the grant of those orders, the Court of Appeal may impose a requirement that the full amount of the awards be paid into Court as a condition of bringing the appeal.

The Appellants had sought and obtained leave to appeal against a judgment of Field J requiring directors of the Appellants to disclose the Appellants' worldwide assets to the Respondent, to assist with the Respondent's enforcement of two arbitration awards (see here). The Respondent applied for an order that the Appellants only be entitled to pursue this appeal if they first paid the amount of the awards into Court.

CPR 52.9(1)(b) permits the imposition of conditions on the pursuit of an appeal, once permission has been granted, where there is a "compelling reason" for doing so. Gloster LJ found that there were such reasons on the facts. She held that "in circumstances where a judgment debtor is attempting to appeal the original judgment imposing liability upon him, is well able to pay the judgment debt, but is taking all steps open to him to avoid enforcement, there may well be a compelling reason for the imposition of a payment condition." Gloster LJ further held that there was no difference between an appeal against the original judgment, and an appeal against separate proceedings to assist in the enforcement of that Judgment. She therefore followed the approach taken by appellate Courts at various stages of the Masri litigation, where conditions requiring the payment into Court of the relevant judgment debt were imposed on a number of appeals against enforcement of that debt. The approach in Masri was held to be applicable notwithstanding that, in that case, the conditions had been imposed upon the original grant of permission under CPR 52.3 and therefore there was no separate requirement to show "compelling reasons".

"Compelling reasons" having been found to exist, the Court was entitled to exercise its discretion to impose conditions. Gloster LJ held that it should do so, furthering the overriding objective of the Court that judgment debts should be paid.

The judgment is here.

Judgment