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UK Supreme Court · [2017] UKSC 16

IPCO: adjournment security is not a price for the right to object

Additional USD 100 million security set aside; objections remitted for determination and existing guarantees preserved.

Two different procedural steps

English enforcement of a Nigerian award had long been adjourned pending Nigerian proceedings, with USD 80 million in guarantees. The Court of Appeal then directed determination of fraud objections in England, but required another USD 100 million, with enforcement to follow non-compliance without determination of those objections. The UKSC reviewed that additional condition.

Article VI: security belongs to its specified adjournment

Paragraphs 24–31 distinguish an adjournment pending a foreign challenge under section 103(5), implementing Convention Article VI, from the time an English court needs to determine Article V objections itself. In the latter situation, security for the award cannot be imposed as the price of determining a properly arguable objection. General procedural powers did not cure that defect, paragraphs 41 and 44.

What was set aside and what remained

The appeal was allowed: the additional USD 100 million condition was set aside, and fraud and non-fraud objections were remitted to the Commercial Court for determination without that condition, paragraph 47. This was neither final refusal of recognition nor a UKSC finding of fraud. Existing USD 80 million guarantees remained under the earlier undertaking until further order, paragraph 46.

Practical boundary

The Court did not prohibit all protective measures: paragraphs 41 and 45 preserve appropriate disclosure, freezing and case-management powers. Security for the award, security for costs and an asset restraint are different measures. This English Convention application is useful comparatively; a Russian court’s particular powers derive from Russian law and applicable treaties.

Sources and legal references

General information. The applicable legal framework depends on the particular dispute, seat and enforcement country.