24/01/2012

West Tankers Inc v Allianz SPA & Generali Assicurazione Generali SPA

In the latest round of the long-running Front Comor dispute, the Court of Appeal has held that a negative declaratory arbitration award (i.e. an award which does no more than make a declaration of non- liability) can be “enforced” under section 66 of the Arbitration Act 1996 even though it does not require the unsuccessful party to do anything.

The issue arose because section 66 gives the court power to enforce an arbitration award “in the same manner as a judgment to the same effect” and, save in exceptional cases, a merely declaratory judgment cannot be enforced by any normal process of execution. However, the Court held that “enforced” in section 66 is not confined to enforcement by execution, but extends to other means of giving judicial force to the award. This broader interpretation, it said, was more in accordance with the purpose of the Act. Accordingly, affirming Field J, the Court of Appeal gave permission to enforce an award declaring that the Insurers were under no liability to the Owners of the vessel and to enter judgment in terms of the award.

Stephen Males QC and Sara Masters instructed by MFB represented the Insurers