English High Court Sets Aside Order Based on Fabricated Kuwaiti Arbitration Award

Citation: [2024] EWHC 436 (Comm)
Judgment on

Introduction

In the case of Contax Partners Inc BVI v Kuwait Finance House (KFH-Kuwait) & Ors, the English High Court was presented with an application to set aside an order which had entered judgment against the Defendants based on a purported Kuwaiti arbitration award. The Defendants alleged the arbitration agreement and award were fabrications, leading to serious allegations of fraud on the court.

Key Facts

The Claimant, represented by H&C Associates and identified as ‘Contax BVI’, sought to enforce a Kuwaiti arbitration award, which they claimed was rendered pursuant to an arbitration agreement with three companies in a banking group (the Defendants). An application was made under section 66 of the Arbitration Act 1996, supported by various documents including witness statements and what was claimed to be the arbitration agreement and award.

Upon suspicion by the Defendants that the award was fabricated, derived from texts in a previous judgment, and not compliant with Kuwaiti law, they sought to set aside the order for enforcement. Evidence suggesting fabrications included a comparison with Picken J’s judgment in Manoukian v Société Générale de Banque au Liban SAL [2022] EWHC 669 (QB), and confirmations from various parties named in the award that they had no knowledge of the arbitration.

The court applied several legal principles, including those pertaining to the enforcement of arbitration awards, applications made without notice, and set aside applications.

  1. Enforcement of Arbitration Awards - The Arbitration Act 1996, section 66, provides for the enforcement of arbitration awards as if they were judgments of the court. However, for an award to be enforced, it must be genuine and rendered under a valid arbitration agreement.

  2. Applications Without Notice - Applications without notice are subject to the innate safeguard allowing the affected party to apply to set aside any resulting order. This principle ensures procedural fairness in instances where an order is obtained without the knowledge of the opposing party.

  3. Set Aside Applications - A key tenet of civil procedure is that a party can apply to set aside a court order that was made without proper legal basis, such as due to a lack of genuine arbitration agreement or evidence of fraudulent actions.

  4. Fraud on the Court - The court is particularly vigilant against fraud on the court. In cases where there are allegations of fabricated documents being presented to mislead the court’s proceedings, the court must scrutinize the evidence rigorously.

  5. Triable Issues and Summary Judgment - The court considered whether there existed a triable issue over the authenticity of the award or if there was a dispositive matter that could be decided without the need for a trial.

Outcomes

The High Court, Mr Justice Butcher, held that there was no genuine arbitration agreement or award and found that the purported documents were fabrications. Consequently, the court set aside the August Order which had granted leave to enforce the award. The decision entailed an evaluation of the presented evidence against standards not just of procedural compliance but also of substantive authenticity, reflecting English law’s emphasis on the integrity of legal proceedings and its robust measures against fraud.

Conclusion

In Contax Partners Inc BVI v Kuwait Finance House (KFH-Kuwait) & Ors, the English High Court underscored the importance of authenticity and good faith in legal proceedings, particularly arbitration which operates on a bedrock of trust and genuine agreements. It firmly reiterated that the judiciary will not condone the presentation of fraudulent documents nor the wasting of judicial resources on enforcing non-existent awards. This case serves as a salutary warning that the courts are prepared to rigorously investigate allegations of fraud to uphold justice and maintain confidence in the English legal system.