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English Court confirms it has no jurisdiction to permit a counterclaim in enforcement proceedings
In a recent case, the High Court held that it had no jurisdiction to permit a counterclaim in proceedings to enforce a New York Convention award pursuant to section 101(2) of the English Arbitration Act.
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Published 8 February 2022
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Craig Deuchrass
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In Selevision Saudi Co v BeIN Media Group LLC [2021] EWHC 2802 (Comm), the High Court held that it had no jurisdiction to permit a counterclaim in proceedings to enforce a New York Convention award pursuant to section 101(2) of the English Arbitration Act and CPR 62, reaffirming the “very streamlined” and “highly summary” nature of the enforcement process.
Background
BeIN Media Group (BMG) is a broadcasting organisation that operates television satellite channels in 40 countries. Selevision Saudi (SSC) provides broadcasting-related services. The parties entered into a Distributor Agreement (the Agreement) in May 2014 which retained Selevision as a non-exclusive distributor of set-top boxes that allowed customers to watch BMG media channels. This dispute arose out of an arbitration between these two parties which was conducted in Qatar. The arbitrators had found that BMG was liable to pay SSC over $8 million (USD) for its breaches of a Distribution Agreement, but BMG did not honour this award.
Selevision commenced proceedings to enforce the award in England pursuant to section 101 of the Arbitration Act 1996, in accordance with CPR 62.18 (as BMG held assets in the jurisdiction). BMG sought permission to bring a counterclaim under CPR 8.7 and to serve a Part 20 claim.
The decision
In the claim for enforcement of an arbitration award, the High Court held that it did not have the power to grant permission to bring a counterclaim. The Court focused on the nature of enforcement proceedings and that the Civil Procedure Rules were not intended for complex claims that were not made in the original arbitration. Specifically, the court held that CPR 8.7 is not part of the procedure for applications for enforcement of awards under CPR 62.18, and Part 20 claims may not be brought within them.
The High Court reasoned:
1. Applications under CPR 62.18 are intended to be a simple method of enforcement of awards. The Court did not have jurisdiction to allow for BMG’s counterclaim, as counterclaims raised at that stage would by definition have to relate to a matter outside the scope of the arbitration agreement or otherwise they should have been part of the arbitration.
2. There is no good reason to allow Part 20 proceedings within a CPR 62.18 application. Enforcement proceedings are highly summary and essentially quasi-administrative proceedings. To permit counterclaims or other additional claims would be likely to thwart or complicate enforcement.
Comment
The gateway for allowing new counterclaims at enforcement stage is unsurprisingly blocked and the case confirms that the English courts are reluctant to allow “practical inhibition” on the enforcement of a New York Convention award and confirms the English Court’s pro-arbitration stance. The decision affirms that parties will not be permitted to raise new counterclaims at the enforcement stage of a New York Convention arbitration award.
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Shorter Reads
English Court confirms it has no jurisdiction to permit a counterclaim in enforcement proceedings
In a recent case, the High Court held that it had no jurisdiction to permit a counterclaim in proceedings to enforce a New York Convention award pursuant to section 101(2) of the English Arbitration Act.
Published 8 February 2022
Associated sectors / services
Authors
In Selevision Saudi Co v BeIN Media Group LLC [2021] EWHC 2802 (Comm), the High Court held that it had no jurisdiction to permit a counterclaim in proceedings to enforce a New York Convention award pursuant to section 101(2) of the English Arbitration Act and CPR 62, reaffirming the “very streamlined” and “highly summary” nature of the enforcement process.
Background
BeIN Media Group (BMG) is a broadcasting organisation that operates television satellite channels in 40 countries. Selevision Saudi (SSC) provides broadcasting-related services. The parties entered into a Distributor Agreement (the Agreement) in May 2014 which retained Selevision as a non-exclusive distributor of set-top boxes that allowed customers to watch BMG media channels. This dispute arose out of an arbitration between these two parties which was conducted in Qatar. The arbitrators had found that BMG was liable to pay SSC over $8 million (USD) for its breaches of a Distribution Agreement, but BMG did not honour this award.
Selevision commenced proceedings to enforce the award in England pursuant to section 101 of the Arbitration Act 1996, in accordance with CPR 62.18 (as BMG held assets in the jurisdiction). BMG sought permission to bring a counterclaim under CPR 8.7 and to serve a Part 20 claim.
The decision
In the claim for enforcement of an arbitration award, the High Court held that it did not have the power to grant permission to bring a counterclaim. The Court focused on the nature of enforcement proceedings and that the Civil Procedure Rules were not intended for complex claims that were not made in the original arbitration. Specifically, the court held that CPR 8.7 is not part of the procedure for applications for enforcement of awards under CPR 62.18, and Part 20 claims may not be brought within them.
The High Court reasoned:
1. Applications under CPR 62.18 are intended to be a simple method of enforcement of awards. The Court did not have jurisdiction to allow for BMG’s counterclaim, as counterclaims raised at that stage would by definition have to relate to a matter outside the scope of the arbitration agreement or otherwise they should have been part of the arbitration.
2. There is no good reason to allow Part 20 proceedings within a CPR 62.18 application. Enforcement proceedings are highly summary and essentially quasi-administrative proceedings. To permit counterclaims or other additional claims would be likely to thwart or complicate enforcement.
Comment
The gateway for allowing new counterclaims at enforcement stage is unsurprisingly blocked and the case confirms that the English courts are reluctant to allow “practical inhibition” on the enforcement of a New York Convention award and confirms the English Court’s pro-arbitration stance. The decision affirms that parties will not be permitted to raise new counterclaims at the enforcement stage of a New York Convention arbitration award.
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Article contributor
Craig
DeuchrassSenior Associate
Specialising in Commercial disputes, Banking & financial disputes and Commercial arbitration
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