Asset tracing and enforcement update
Published on 1st Jul 2015
This latest issue of our asset tracing and enforcement update includes the latest on a range of issues including: the enforcement of arbitration awards in the UAE, service of proceedings in Russia and the new register of beneficial ownership of UK companies.
The simple things – enforcement of arbitration
awards in the UAE
A recent Dubai Court of Appeal decision provides a
salutary warning that seemingly minor administrative omissions can have a
devastating effect when it comes to enforcing awards in the UAE.
Having been granted an
award in an arbitration in Dubai, the claimant attempted to enforce that
award in Dubai. However, the Court picked up on two seemingly minor
administrative deficiencies in the award: the arbitrators had failed to
separately sign both the award and the reasons for giving that award, and the
dissenting arbitrator had failed to give reasons for not signing the award.
As a result of those
deficiencies, the Court refused to enforce the award. This decision provides a
reminder that procedural requirements for arbitration should be at the
forefront of parties’ minds to ensure that their efforts are not squandered by
subsequent ratification and enforcement issues.
Corporate
transparency – New UK public register of beneficial interests in companies
New English legislation will require all UK companies
(other than publicly traded companies) to maintain a register of those people
who have significant control over the company.
This new “register of people with significant
control” – to be known as the
“PSC register” – will contain information on individuals who
ultimately own or control more than 25% of a company’s shares or voting rights,
or who otherwise exercise control over the company and its management.
Given that the
individual or individuals who control a company are often different from those
listed on the company’s register of shareholders, in many cases the PSC
register will look quite different – and be a much more interesting document –
than the shareholder register. A company’s PSC register will be available for
public inspection and will be searchable online via Companies House.
The introduction of the
PSC register is a central part of the UK Government’s G8 commitment to greater
corporate transparency. The UK is leading the way on this issue, with similar
moves now put in motion at EU level as part of the 4th Money Laundering Directive.
The additional information contained in the PSC
register will be a useful new tool in identifying assets and aiding
international enforcement.
Have you submitted to a foreign jurisdiction? A
Chinese example
The case of Spliethoff’s
Bevrachtingskantoor BV v Bank of China Ltd shows the dangers of
being seen to have participated in foreign proceedings, in anything beyond a
jurisdiction challenge, when it comes to enforcement in a common law
jurisdiction.
In this case,
proceedings were brought in China by the defendant in breach of an arbitration
clause. The claimant obtained an anti-suit injunction in England on the basis
of a binding arbitration clause but the defendant ignored the injunction and
continued with the Chinese proceedings.
The claimant argued
that judgments obtained in the Chinese proceedings should not be enforced in
England on grounds of public policy, in view of the breach of the arbitration
clause and the anti-suit injunction. However, the court determined that it had
no discretion to refuse enforcement on grounds of public policy since the
claimant had submitted to the Chinese court’s jurisdiction (after failing in
its jurisdiction challenge in the Chinese courts).
This case illustrates the limited scope of
public policy arguments and the risks of participating in abusive foreign
proceedings.
Serving
proceedings in Russia: Service valid despite being returned “not
served”
In disputes involving international parties, the
challenges of validly serving judicial documents in other countries can be
central to an effective overall strategy.
In some countries, it
is all too easy for defendants to refuse to accept documents served through
official channels and for the documents to be returned to the court of origin.
In this case before the English High Court, the
English court determined that service had been validly effected even though the
Russian court had returned documents as having not been served.
