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CYPRUS: THE EFFECT OF A JUDGMENT BY A COURT OF SUPERVISORY JURISDICTION AT THE SEAT OF ARBITRATION, ON THE VALIDITY, LEGALITY AND ENFORCEABILITY OF ARBITRAL AWARDS IN THE ENFORCING COUNTRIES

 

A judgment of the Supervisory Court of the seat of the arbitration, on the validity, finality and enforceability of an arbitral award, has a final and binding effect upon the parties, their privies, and successors in title, giving rise to an issue estoppel per rem judicatam or other preclusion in the Court in which enforcement is sought. Use of the doctrines of res judicata or issue estoppel by the Courts, grants preclusive effect to issues or claims decided in judgments of the supervisory courts of the seat. Parties to such award are thus barred from re-litigating before any enforcement Court, the same matters, or issues, relating to the validity and enforceability of the said awards, as well as from raising any other issue, or matter which the parties, should, or could have raised, before the Supervisory Court in the context of the relevant challenge.

 

The judgment of Elder J recognized the finality of the Austrian Court’s decision in Diag Human Se -v- The Czech Republic [2] not to enforce the award, by virtue of an issue estoppel between the parties. Similar Approach was adopted in the Hong Kong decision in Astro Nusantara International BV -v- PT First Media TBK [3] and in the Australian case of Gujarat NRE Coke Ltd -v- Coeclerici Asia (Pte) [4] .

 

There will only be a possibility of res judicata or estoppel if those concepts are recognized by the second court. The position of our common law jurisdiction as to the relevant test for res judicata or claim/issue estoppel reflects that of England and is as follows: (i) the judgment of the foreign court must be of a court of competent jurisdiction as recognized under English private international law, (ii) must be final and conclusive and (iii) properly be said to be “on the merits”; (iv) the parties to the English litigation must be the same as in the foreign litigation and (v) the raised issues must be of identical nature.

 

Provided that the test is met, a party is precluded from re-opening an issue that had been already determined before a court of supervisory jurisdiction at the seat of the arbitration.

 

[1] Dallah Real Estate & Tourism Holding, Co. v. Ministry of Religious Affairs of the Gov't of Pakistan [2010] UKSC 46, [2011] 1 AC 763 [98] per Lord Collins JSC

[2] (2014) EWHC 1639

[3] HCCT 45/2010

[4] [2013] FCAFC 109

[5] Carl Zeiss Stiftung v Rayner & Keeler Ltd (no 2) [1967] 1 AC 853 (HL); The Sennar (no 2) [1985] 1 WLR 490

 

 

 

For further information on this topic please contact

Mr. Soteris Pittas and Ms. Thea Pitta( spittas@pittaslegal.com & theapitta@pittaslegal.com) at SOTERIS PITTAS & CO LLC,

by telephone (+357 25 028460) or by fax (+357 25 028461)

 

 

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