“i. Can the fact that Respondents are subject to an investigation by the UK Serious Fraud Office influence their payment obligations towards Claimant and, if so, in which way? Is it necessary that payments under the Consultancy Agreements are officially cleared by the Serious Fraud Office? Is Claimant's alleged failure to provide a satisfactory level of information to Respondents in connection with the criminal investigation, and its alleged refusal of a complementary audit, of relevance to Respondents' payment obligations and, if so, in which way? ii. Is Respondents' internal compliance policy in relation to anti-bribery standards of relevance to Respondents' payment obligation under the Consultancy Agreements, and, if so, in which way, i.e. are Respondents allowed to withhold payment of the amounts claimed by Claimant? iii. Are Respondents under an obligation to pay the outstanding invoices under the Consultancy Agreements in case Claimant is not able to provide proof of the content of its service? Can the - alleged - nonfulfillment of this obligation be a valid reason for not paying the invoices? iv. Are Respondents under an obligation to pay these invoices if there is evidence of or arguments for corruption? v. What are the costs of the arbitration and how should they be borne by the Parties?”
“It remains that the issues identified by the [Defendants] during the different audits conducted raised serious doubts on potential corrupted practices and a breach by ABL of its contractual obligations. Therefore, in the absence of satisfactory clarifications from [ABL] its claim for payment of consultancy fees shall be dismissed by the Arbitral Tribunal.”
“The issue at stake is the performance by the Claimant of its ethics and compliance obligations”
“the Arbitral Tribunal, after having analysed the elements of proof that the appellants had provided to it in order to support their implicit allegation of corruption aimed at the respondent, considered that this allegation had not been proved… Such a conclusion arises from an assessment of the evidence that this Court cannot re-examine.”
“103 Refusal of recognition or enforcement (1) Recognition or enforcement of a New York Convention award shall not be refused except in the following cases.… (3) Recognition or enforcement of the award may also be refused if the award is in respect of a matter which is not capable of settlement by arbitration, or if it would be contrary to public policy to recognise or enforce the award.”
“section 103 of the Act reflects and embodies the predisposition in favour of enforcing New York Convention awards that runs through the New York Convention itself.”
“the public policy exceptions are a safety valve that should only be invoked in a clear case and which must be approached with extreme caution.”
“a party faces a heavy burden where the competent supervisory courts in that state have previously considered and rejected challenges to the validity, made on grounds which on analysis bear a close resemblance to those deployed on the application in this jurisdiction.”
“(v) If the court concluded that the arbitration agreement conferred jurisdiction to determine whether the underlying contract was illegal and by the award the arbitrators determined that it was not illegal, prima facie the court would enforce the resulting award. (vi) If the party against whom the award was made then sought to challenge enforcement of the award on the grounds that, on the basis of facts not placed before the arbitrators, the contract was indeed illegal, the enforcement court would have to consider whether the public policy against the enforcement of illegal contracts outweighed the countervailing public policy in support of the finality of awards in general and of awards in respect of the same issue in particular.”
“I have no doubt that an English Court would give predominant weight to the public policy of sustaining the parties' agreement to submit the particular issue of illegality and initial invalidity to ICC arbitration rather than to the public policy of sustaining the non-enforcement of contracts illegal at common law. The importance of the former consideration would be held to outweigh the need to protect against the risk that arbitrators might by uncorrectable errors of fact enforce an illegal contract.”
“In substance they seek to use the public policy doctrine to conduct a re-trial on the basis of additional evidence of illegality when it was open to them to adduce that evidence before the arbitrators. Such an exercise would appear to be clearly in conflict with the principles of issue estoppel.”
“On balance I have come to the conclusion that the public policy of sustaining international arbitration awards on the facts of this case outweighs the public policy in discouraging international commercial corruption … That conclusion is not to be read as in any sense indicating that the Commercial Court is prepared to turn a blind eye to corruption in international trade, but rather as an expression of confidence that if the issue of illegality by reason of corruption is referred to high calibre ICC arbitrators and duly determined by them, it is entirely inappropriate in the context of the New York Convention that the enforcement court should be invited to retry that very issue in the context of a public policy submission.”
“The English court takes cognisance of the fact that the underlying contract, on the facts as they appear from the award and its reasons, does not infringe one of those rules of public policy where the English court would not enforce it whatever its proper law or place of performance. It is entitled to take the view that such domestic public policy considerations as there may be, have been considered by the arbitral tribunal. It is legitimate to conclude that there is nothing which offends English public policy if an arbitral tribunal enforces a contract which does not offend the domestic public policy under either the proper law of the contract or its curial law, even if English domestic public policy might have taken a different view.”
“I would … agree with the judge that normally the conditions to be fulfilled will be (a) that the evidence to establish the fraud was not available to the party alleging the fraud at the time of the hearing before the arbitrators; and (b) where perjury is the fraud alleged, i.e., where the very issue before the arbitrators was whether the witness or witnesses were lying, the evidence must be so strong that it would reasonably be expected to be decisive at a hearing, and if unanswered must have that result.”
“[311] although normally at the enforcement stage a party who brings an action on the award will be estopped from attempting to re-argue the points on which he has lost the arbitration … there are exceptional circumstances where the court will not allow reliance on an estoppel…. [314]…there will be circumstances in which, despite the prima facie position of an award preventing a party reopening matters either decided by the arbitrators or which the party had every opportunity of raising before the arbitrators, the English court will allow a re-opening. The court is in this instance performing a balancing exercise between the competing public policies of finality and illegality; between the finality that should prima facie exist particularly for those that agree to have their disputes arbitrated, against the policy of ensuring that the executive power of the English court is not abused. It is for those reasons that the nature of the illegality is a factor, the strength of case that there was illegality also is a factor, and the extent to which it can be seen that the asserted illegality was addressed by the arbitral tribunal is a factor.”
“I have reached a different conclusion to that of the judge. I disagree with him as to the appropriate level of opprobrium at which to place commercial corruption. It seems to me that the principle against enforcing a corrupt bargain of the nature of this agreement, if the facts in M.M.'s affidavit are correct, is within that bracket recognised … as being based on public policy of the greatest importance and almost certainly recognised in most jurisdictions throughout the world. I believe it important that the English court is not seen to be turning a blind eye to corruption on this scale. I believe that if unanswered the case at present made on M.M.'s affidavit would be conclusive against Westacre being entitled to enforce the agreement and thus the award as a matter of English public policy. I also believe that the judge did not sufficiently consider the extent to which the case now presented on bribery was examined by the arbitration tribunal. When one examines the circumstances of this case one can see that in truth the bribery issue has not been ventilated properly before the Swiss arbitral tribunal.”
“It is of crucial importance to evaluate both the majority decision in the arbitration and the ruling of the Swiss Federal Tribunal, Swiss Law being both the proper law of the contract and the curial law of the arbitration and Switzerland, like the United Kingdom, being a party to the New York Convention. From the award itself it is clear that bribery was a central issue. The allegation was made, entertained and rejected… Authority apart in those circumstances I would have thought that there could be no justification for refusing to enforce the award.. … in Soleimany v. Soleimany [1999] Q.B. 785, 800, it seems to have been suggested that some kind of preliminary inquiry short of a full scale trial should be embarked upon whenever ‘there is prima facie evidence from one side that the award is based on an illegal contract . . .’. For my part I have some difficulty with the concept and even greater concerns about its application in practice, but,.., it seems to me that any such preliminary inquiry in the circumstances of the present case must inevitably lead to the same conclusion, namely, that the attempt to reopen the facts should be rebuffed. I so conclude by reference to the criteria given by way of example in Soleimany v. Soleimany itself. First, there was evidence before the tribunal that this was a straightforward, commercial contract. Secondly, the arbitrators specifically found that the underlying contract was not illegal. Thirdly, there is nothing to suggest incompetence on the part of the arbitrators. Finally, there is no reason to suspect collusion or bad faith in the obtaining of the award.” 100.Sir David Hirst “entirely” agreed with Mantell LJ (indicating that he agreed as to whether it was open to the defendants to challenge the arbitrators’ findings) and said that if the second question, as to whether enforcement should be allowed, had arisen, he would have answered it exactly as Colman J did. 101.The result is that there is actually no clear statement of principle in this area by the Court of Appeal. The decision of the majority in Westacre is effectively that the award is upheld because on the facts the majority concluded that the issue had been “made, entertained and rejected” by the tribunal. The obiter approach of the Court of Appeal in Soleimany was doubted, but no alternative approach was given. 102.The case of R v V is cited by Dicey and was referred to in passing in argument. That was a case concerning a consultancy in Libya, where the issue was whether the contract was one for personal influence. The Tribunal had held that R had failed to establish that the agreement or performance of it were illegal under Libyan law or violated public policy. Steel J considered Westacre and Soleimany, noting the difficulty of fitting together the judgments of the Court of Appeal in Westacre. Dealing with the Westacre Court of Appeal's doubts over the Soleimany Court of Appeal's approach, he went on to say: “The difficulty with the concept of some form of preliminary inquiry is of course assessing how far that inquiry has to go. That must be all the more so where R does not seek to deploy any new evidence (let alone evidence not available at the time of the original reference). Even assuming it is appropriate in the present application to conduct some form of assessment ….”
“Issue estoppel may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant one of the parties seeks to reopen that issue.”
“The authorities show that in order to establish an issue estoppel four conditions must be satisfied, namely (1) that the judgment must be given by a foreign Court of competent jurisdiction; (2) that the judgment must be final and conclusive and on the merits; (3) that there must be identity of parties; and (4) that there must be identity of subject matter, which means that the issue decided by the foreign court must be the same as that arising in the English proceedings …”
“A negative finding in the foreign court, such as a failure to establish something on the balance of probabilities, may not be as readily determined to create res judicata or an issue estoppel as a positive finding (Moss v Anglo-Egyptian Navigation Company (1865–66) LR 1 Ch App 108 , Blair v Curran(1939) 62 CLR 464 , The Popi M[1985] 1 WLR 948 and Kuligowski v Metrobus[2004] 220 CLR 363 ).”
“Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: …. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, ... It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. ….”
“Given the limited grounds upon which the court may refuse to enforce a New York Convention award then, in applying the principles relevant to summary judgment and striking out, the court needs to assess what is put before it with a critical eye. In particular where a party has not raised a matter which they could have raised before the arbitral tribunal or where they have taken inconsistent positions to those they now urge upon the court, the court should not lightly accede to a submission that the matter needs to be determined at a trial where the underlying reason is often to cause further delay and costs in the hope that something may turn up either to strengthen an existing ground or to establish a new ground.”
“In the absence of special circumstances, the parties cannot return to the court to advance arguments, claims or defences which they could have put forward for decision on the first occasion, but failed to raise. The rule is not based on the doctrine of res judicata in a narrow sense, nor even on any strict doctrine of issue or cause of action estoppel. It is a rule of public policy based on the desirability, in the general interest as well as that of the parties themselves, that litigation should not drag on for ever and that a defendant should not be oppressed by successive suits when one would do. That is the abuse at which the rule is directed.”
“Except in special circumstances where this would cause injustice, issue estoppel bars the raising in subsequent proceedings of points which (i) were not raised in the earlier proceedings or (ii) were raised but unsuccessfully. If the relevant point was not raised, the bar will usually be absolute if it could with reasonable diligence and should in all the circumstances have been raised.”
“there may be exceptional cases where the powers of the supervisory court are so limited that they cannot intervene even where there has been an obvious and serious disregard for basic principles of justice by the arbitrators or where for unjust reasons, such as corruption, they decline to do so”
“The comment A reference to the judgment of Phillips J in Lemenda that it was ‘questionable whether the moral principles involved [were] so weighty as to lead an English court to refuse to enforce an agreement regardless of the country of performance and regardless of the attitude of that country to such a practice’ is one which is, in my judgment, if anything, somewhat understated. Outside the field of such universally-condemned international activities as terrorism, drugtrafficking, prostitution and paedophilia, it is difficult to see why anything short of corruption or fraud in international commerce should invite the attention of English public policy in relation to contracts which are not performed within the jurisdiction of the English courts. That it should be the policy of the English courts to deter the exercise of personal influence short of corruption and fraud to obtain valuable contracts in foreign countries in which such activity is not contrary to public policy by refusing to enforce contracts would involve an unjustifiable in-road into the principle of pacta sunt servanda.” 155.Alstom naturally points to the reference to corruption as being in the “universally condemned” category. However the decision of the Court of Appeal on that point lends further clarity: “… albeit the award is not isolated from the underlying contract, it is relevant that the English court is considering the enforcement of an award, and not the underlying contract. The English court takes cognisance of the fact that the underlying contract, on the facts as they appear from the award and its reasons, does not infringe one of those rules of public policy where the English court would not enforce it whatever its proper law or place of performance. It is entitled to take the view that such domestic public policy considerations as there may be, have been considered by the arbitral tribunal. It is legitimate to conclude that there is nothing which offends English public policy if an arbitral tribunal enforces a contract which does not offend the domestic public policy under either the proper law of the contract or its curial law, even if English domestic public policy might have taken a different view.” 156.That indicates that this Court will not, at the stage of enforcement, effectively prioritise English public policy over that of the public policy of the seat, unless: (i) on the facts as they appear from the award the underlying contract infringes one of those rules of public policy where the English Court would not enforce regardless of its proper law or place of performance or; (ii) failing to do so would also fail in comity towards the place of performance. This, it seems to me, is not irrelevant in understanding the line which the Courts here have taken. It also harmonises with the decision in Soleimany which was a case where something which one might call universally recognised illegality (contract to breach a foreign law) was clear from the face of the award, even if the Tribunal had not considered it. 157.The first aspect to consider is the situation in which the allegations are so serious that the Court would act, regardless of the determination of the curial court. In RBRG Hamblen LJ referred to where the illegality reflects considerations of international public policy and cited Phillips J in Lemenda referring to “universal principles of morality”
“..it is in our view inconceivable that an English court would enforce an award made on a joint venture agreement between bank robbers, any more than it would enforce an agreement between highwaymen, Everet v. Williams (unreported): see Lindley on Partnership, 13th ed. (1971), p. 130, note 23 Also discussed at pp. 76–8 of Sir Robert Megarry's first Miscellany-At-Law (1955) .” 159.Of course, as I have said, corruption is mentioned by Colman J as falling within this category. But to take a “one size fits all” approach to corruption is to elide a number of different possibilities of differing degrees of seriousness. The next question is how the authorities treat these different possibilities. The authorities seem to indicate that a contract to bribe (i.e. with the intention of bribing) foreign public officials would be one which this court would not enforce. So too, but less clearly, would I expect it to treat a contract to bribe outside the sphere of public officials (e.g. a contract specifically to obtain valuable trade secrets by bribing an employee of a competing company). However while what is in this case sought to be prayed in aid is a case on bribery of public officials, and hence at the serious end of the subject matter scale, it is what one might call incidental bribery - not planned, not contracted for, not suspected. My conclusion is that this is something which is probably regarded as somewhat less serious. 160.What is in issue here may be a form of corruption, but it is therefore not the most acute form where a contract is a contract with the purpose of bribery. The distinction based on the nature of the illegality was a point remarked on in Soleimany, where illegality based on intent to commit an illegal act in the place of performance was the nature of the public policy trigger. It is also worthy of note that one basis for Waller LJ's disagreement with Colman J in Westacre was the nature of the illegality in that case: he referred to “a corrupt bargain of the nature of this agreement” and to “corruption on this scale”. 161.The extent to which this is relevant may be contentious. Westacre provides no clear guide. Waller LJ in Westacre suggested that regard should be had to the nature of the illegality, the strength of the case on illegality and the extent to which the asserted illegality was addressed by the Arbitral Tribunal. While the majority in Westacre concluded obiter that the seriousness of the allegation should not be a factor, they did not make clear whether they were speaking of the nature of the allegation or the strength of the case being made. 162.The better view appears to be that the type of corruption may be of significance. In RBRG Hamblen LJ noted that “Whilst recognising that an award enforcing a contract to bribe would not be enforced, the courts have enforced awards where it has been alleged that the underlying contract has been procured by bribery.”
“The authorities in the analogous area of competition law demonstrate that these are the type of policy reasons which justify refusing to enforce an arbitration award. They are therefore seen as matters which do at least in modern terms deal with a sufficiently fundamental or essential principle or norm.”
“Member States attach particular importance to combating corruption in both the public and the private sector, in the belief that in both those sectors it poses a threat to a law-abiding society as well as distorting competition in relation to the purchase of goods or commercial services and impeding sound economic development ....”
“Due to the concealed nature of acts of bribery, a contention that an arbitration award orders the payment of sums intended to finance corrupt acts may be reviewed by a court ruling on whether to grant exequatur solely on the basis of a set of indicia. Therefore the rights of the defence in this case concern the admissibility, under the rules of civil procedure, of the evidence produced by the appellant, the reality of the indicia and whether the indicia are sufficiently serious, precise and consistent, rather than precisely identified corrupt acts.”
“the Court does not have jurisdiction to determine whether a party to the arbitration committed bribery ... under the criminal laws of a national legal system, but only to determine whether recognition or enforcement of the award would contravene the objective of combating bribery.”
“(1) The duty of the applicant is to make ‘a full and fair disclosure of all the material facts:’ see Rex v. Kensington Income Tax Commissioners, Ex parte Princess Edmond de Polignac [1917] 1 K.B. 486 ,514, per Scrutton L.J. (2) The material facts are those which it is material for the judge to know in dealing with the application as made: materiality is to be decided by the court and not by the assessment of the applicant or his legal advisers: see Rex v. Kensington Income Tax Commissioners, per Lord Cozens-Hardy M.R., at p. 504”. 208.The second is the equally classic quote from Bingham J in Siporex Trade v Comdel Commodities [1986] 2 LLR 428, 437, where he said that the Claimant: “Must show the utmost good faith and disclose his case fully and fairly … He must identify the crucial points for and against the application, and not rely on general statements and the mere exhibiting of numerous documents. He must investigate the nature of the cause of action asserted and the facts relied on before applying and identify any likely defences.” 209.The question is whether the statement made on11 October 2019 , “I have been informed by the Claimant and believe that, as at the date of this Witness Statement, the Defendant has not complied with the Award in any respect” was accurate and whether, taken in context, it complied with the obligation of full and frank disclosure. 210.Despite Mr Harris' best efforts I am not persuaded that, taken alone, the line in Fussell 1 was accurate or a proper characterisation of the position. It seems wrong to say that Alstom had not complied “in any respect” when it had (albeit pursuant to a Court Order) paid over the full amount. As at the date of ABL’s application to enforce, the true position was that Alstom had complied with the Award, as a result of the payment made following the seizure performed on ABL’s request, but that it had obtained an order for repayment of that sum. 211.While ABL says that there was no intention to mislead the Court, as neither Mr Fussell nor Ms Guo Qi understood the true position in October 2019, at the time of ABL’s application to enforce, that can only be a partial excuse. Neither of them may have been aware of the finer points of the freezing regime in France. One or both of them may have been under the impression that the money had by this stage been returned to Alstom. Certainly that is Ms Guo Qi’s evidence; she says she was told by her husband that the funds had been returned to Alstom. But both will have been aware of the fact that a payment had previously been made. A full and frank answer would have flagged, at least by reference, this fuller story. 212.However at the same time I am not persuaded that a fair presentation would have involved the (somewhat partial) summary which Mr Gledhill urged as the requirements of such a presentation. 213.My conclusion is that the specific statement at paragraph 34 fell somewhat short, as I have indicated. Had it been the sole account given it would most certainly have counted as a material breach of the obligation to give full and frank disclosure. However one has to read the whole of the evidence – subject to the cautions in the authorities such as Siporex as to the inadequacy of general statements and annexures to make good the position. 214.When one does so one can see that paragraph 34 comes a little way before the section which is headed “Full and Frank Disclosure”