As a condition to challenging enforcement or recognition of an arbitration award, the UK Supreme Court overturned a Court of Appeal decision which imposed a $100 Million security obligation on a New York Convention arbitral award debtor pursuant to Section 103(5) of the Arbitration Act 1996 (the "Act").
Distinguishing Dardana v. Yukos, in which the court found there was limited power under Section 103(5) of the Act to order security in the instance of a further adjournment, the Supreme Court found that the Court of Appeals order directing the security obligation was not within the scope of the court's jurisdiction. Here, an adjournment had not been granted, and thus there was no jurisdiction for the Court of Appeals to order the security.
Further, looking at articles V and VI of the New York Convention, which established a uniform approach for recognition and enforcement, the Supreme Court found the provision of security there was only to be used in cases where an adjournment was granted and the party was seeking to set aside or suspend the foreign proceeding's award.
IPCO (Nigeria) Ltd. v. Nigerian National Petroleum Corp., [2017] UKSC 16 (United Kingdom Supreme Court, March 1, 2017)
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