By Oliver Browne and Robert Price

On 6 June 2017, the High Court held that there was sufficient evidence that an award of over US$500 million in damages against the Republic of Kazakhstan may be tainted by fraud and that this should be examined at trial (Stati v Kazakhstan [2017] EWHC 1348 (Comm)).

This bold, first instance decision indicates that, despite a reluctance to prevent the enforcement of awards under the New York Convention, the English courts are willing thoroughly to investigate claims under section 103 of the Arbitration Act 1996 and not enforce awards deemed contrary to public policy.

Background

Anatolie Stati, Gabriel Stati, the Ascom Group S.A., and Terra Raf Trans Traiding Ltd (the Claimants) commenced the initial arbitration, instituted pursuant to the Energy Charter Treaty, against Kazakhstan (the State) in Sweden. In December 2013, the arbitral tribunal found in favour of the Claimants, and in February 2014, the tribunal granted initial permission for the Claimants to enforce their award in England. Parallel enforcement proceedings were also commenced by the Claimants in the US courts.