In what has been described a “quite possibly unique” set of circumstances, the High Court has set aside a purported £74 million arbitration award, finding that the arbitration agreement and the award itself were fabricated.
On 30 January 2024, Mr Justice Butcher heard the application to set aside the order in Contax Partners Inc BVI v Kuwait Finance House (KFH-Kuwait) & Ors [2024] EWHC 436 (Comm)
Granting the order in August 2023
He originally made an order on 9 August 2023, which entered judgment against the Defendants in the terms of the purported Kuwaiti arbitration award (the August Order).
Reflecting on the original award, Mr Justice Butcher recalled that the paper application was difficult to understand, but in retrospect he allowed “undue allowance for difficulties apparently arising from documents being prepared by people who were not native English speakers and/or whose grasp of English procedure was not perfect.”
Understandably, it did not occur to him at the time that the documents may be fabrications.
The ‘arbitration’ in Kuwait
The Kuwaiti arbitration award was dated 28 November 2022 (the Award), purportedly awarded by the Kuwait Chamber of Commerce and Industry Commercial Arbitration Centre (KCAC). It was further said that the defendant had sought to appeal the award to the Commercial Court of Appeal in Kuwait and the Upper Court had endorsed the Award (the Kuwaiti Judgment).
However, the Defendants’ case in the hearing in January 2024 was that there was never an arbitration at all. The Award is an out-and-out fabrication. The Court agreed that there was no real doubt, and no triable issue, that the Award was not genuine and is a fabrication.
The evidence for fabrication
First, in what may be seen as a comical move if it were not so serious, substantial parts of the Award were lifted directly from Picken J’s judgment in Manoukian v Société Générale de Banque au Liban SAL [2022] EWHC 669 (QB) (‘Manoukian’). Mr Justice Butcher said that “if the Award were genuine, it would mean that the arbitration had played out in a way which was uncannily – one might fairly say miraculously – similar to what had happened in front of Picken J”
Secondly, there appeared to be no records of the proceedings. The KCAC had confirmed that no cases had been brought in that forum against any of the Defendants and the Kuwait Ministry of Justice confirmed that there was no record of any proceedings between the parties during the relevant time.
Thirdly, there were major procedural deficiencies. Most notably, Kuwaiti judgments are supposed to be in Arabic. There was no Arabic translation in evidence and no indication that the Kuwaiti Judgment purported to be a translation. Further, awards should contain a summary of the agreement to arbitrate and should be signed by all arbitrators. None of these procedures had been followed.
Raising unanswered, but serious questions
All of this led the Court to conclude that there was no arbitration agreement, there was no arbitration, and the Award and Kuwaiti Judgment were fabrications.
That is an unsettling conclusion, and as Mr Justice Butcher commented, “there are a considerable number of unanswered, but serious, questions”. It is so far unclear who was responsible for the fabrications and whether there is culpability as to the way in which the application for permission to enforce the purported Award was presented to the court.
Mr Justice Butcher said that “those are matters which are likely to require investigation hereafter.”
The nature of these circumstances is quite possibly unique, involving allegations of fraud on the court, which are very serious. It remains to be seen how this issue of dishonesty will conclude.
Credit: Rahman Ravelli
