In Diag Human SE v Czech Republic [2014] EWHC 1639 (Comm) (Eder J), an award creditor sought to enforce in England an arbitral award against the Czech Republic. In a previous decision, the Supreme Court of Austria had held that the award was not yet binding and had, on that basis, refused enforcement of the award under the New York Convention. The essential question before Mr. Justice Eder (“Eder J”) in the English enforcement proceeding was whether the Austrian court’s decision precluded the English court from making its own determination whether the arbitral award was binding.

 

Eder J held that, where a foreign court had determined that an arbitral award was not yet binding, an English court would not reopen that determination, even if the English court considered the foreign court’s decision to have been wrong on the facts or as a matter of English law. Eder J’s holding was based on his application of the principle of issue estoppel, which generally precludes a party from relitigating an issue that has already been decided against it. The principle is frequently applied to the prior judgments of foreign as well as English courts.

 

This was the first case to apply the principle of issue estoppel in the context of proceedings to enforce an arbitral award. In addition to containing noteworthy discussion of the meaning of “binding” under the New York Convention, Eder J’s decision will likely have a practical impact on enforcement strategy when England is one of multiple jurisdictions where an award creditor is considering proceedings.

 

 

Before turning to the facts of the case, it is helpful to begin with an overview of the relevant legal provisions.