Originally from American Review of International Arbitration - ARIA

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I. INTRODUCTION
Rarely, over the decades following its entry into force, was the 1958 United
Nations Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, or New York Convention,1 the subject of a judgment of the UK House of
Lords.2 Yet, within barely over a year after its succession to the House of Lords
in October 2009, the United Kingdom Supreme Court delivered a judgment that
may not make up for all that lost time, but is deeply instructive nonetheless. The
decision in Dallah Real Estate and Tourism Holding Company v. Ministry of
Religious Affairs, Government of Pakistan3 became the vehicle for the Court to
lay down important markers not only for arbitration with sovereign entities, but
for the judicial role in the enforcement of foreign awards generally.
On the facts, Dallah looks very much like just another entry in a long series of
arbitral awards tackling the issue of the separateness of States from their agencies
and instrumentalities. The issue has been a recurrent one because, by the time a
dispute arises and an arbitration ensues, the instrumentality that is the signatory
party is often no longer an attractive respondent. It may lack assets to pay an
award, and it may not even any longer exist. After briefly setting out the facts of
the case and its procedural history in Part II of this article, I explore in Part III
Dallah’s significance in this first respect.
As will be seen, the UK Supreme Court in Dallah denied enforcement against
the Government of Pakistan of an arbitral award rendered in France, on the ground
that the Government – a non-signatory to the underlying arbitration agreement
signed by one of its instrumentalities – was never bound by that agreement and
therefore not liable for the award. The UK decision is all the more revealing in
this respect since, only a few months later and in full awareness of the UK