Introduction
In our previous article published in International Quarterly – Issue 37, we discussed the fascinating case wherein the English High Court (the "Court") set aside a multibillion-dollar arbitral award against the Republic of Nigeria in October 2023 on the basis that the award had been obtained by fraud.1 The Court has now handed down a judgment on a similar case. On February 2024, in Contax Partners Inc BVI ("Contax") v Kuwait Finance House (KFH-Kuwait) & Ors (the "Defendants"), the Court set aside a multi-million pound Kuwaiti arbitration award (the "Award"), dated November 2022, and Kuwaiti judgment (the "Kuwaiti Judgment") after discovering that there was, in fact, no arbitration agreement, no arbitration had taken place, and the Award itself had been fabricated.
The facts
Contax is identified in its submissions as an "Oil and Gas company, with offices in the Kingdom of Bahrain and operations in more than fifteen countries". In the middle of 2023, Contax submitted an application on a without notice basis seeking to enforce the Award which was purportedly endorsed from the Kuwait Chamber of Commerce and Industry Commercial Arbitration Centre ("KCAC"). On 9 August 2023, the Court made an order granting leave to enforce the Award and entering judgment of the Award (the "August Order"), under s.66 of the Arbitration Act 1996 (the "Act").2 The decision was subsequently served on the Defendants, and third-party debt orders were issued against various banks. The Defendants subsequently discovered that their accounts were frozen and only then discovered the existence of the proceedings. The Defendants then applied to set aside the August Order. In the hearing, which took place in February 2024, the Defendants argued that the Court should set aside the August Order on two grounds:3
- Firstly, that the arbitration claim before the Court was commenced without authority and, therefore, liable to be struck out.
- Secondly, the arbitration agreement and Award simply did not exist.
Language of the Award
Firstly, Mr Justice Butcher (the "Judge") considered the issue of whether the Award was genuine. The Judge found that there were very strong grounds for concluding that the Award itself was a fabrication. He agreed with the Defendants' position that large parts of the Award were taken from elsewhere. In doing so, he referred to five examples where the Award, which was in English, included substantial passages copied from the judgment of Picken J in Manoukian v Société Générale de Banque au Liban SAL,4 with some minor modifications. In response to Contax's suggestion that this was a matter that could only be concluded with expert evidence, the Judge pointed out that the fabrication was obvious, referring in detail to the comparisons for the five examples he had identified.5 He further went to state that, if the Award was genuine, "it would mean that arbitration had played out in a way which was uncannily – one might fairly say miraculously – similar to what happened in front of Picken J".6
No record of Kuwaiti arbitration proceedings
Secondly, the Judge found that there appeared to be no records of the arbitration proceedings. The solicitors representing the First and Second Defendants had exhibited a letter from the Secretariat General of the KCAC confirming that no cases had been brought in that forum against any of the Defendants. They also exhibited a letter from the Kuwait Ministry of Justice, Court of First Instance, confirming that there was no record of any proceedings between the parties between 2000 and November 2023. In addition to this, they submitted a letter from the State of Kuwait Ministry of Justice, stating Contax has no legal disputes against Kuwait Finance House, the First Defendant.7
Procedural issues
Thirdly, the Judge addressed procedural issues with Contex's claim, most notably that the Award did not comply with basic requirements of Kuwaiti law, in particular Article 183 of the Civil Procedure Law, in that, contrary to this Article, the Award is in English rather than Arabic, does not contain a summary of the agreement to arbitrate, and is not signed by all of the arbitrators.8 Correspondingly, the Kuwaiti Judgment should have also been in Arabic and not English.
In light of the above, the Judge found in favour of the Defendants, commenting that the matters put before him led him to conclude that there was no arbitration agreement or arbitration, and that the Award and the Kuwaiti Judgment were fabrications. Therefore, the Judge concluded that there was no triable issue in relation to Contex's claim and, for these reasons, set aside the August Order that entered judgment against the Defendants in terms of the purported Award.
Conclusion
Like The Federal Republic of Nigeria v Process & Industrial Developments Limited [2023] EWHC 2638 (Comm),9 this case is a reminder that English High Courts will consider disclosure and supporting documents to witness statements with some care and act with due diligence to ensure that a judgment will not unintentionally cause lasting harm. In the Nigeria matter, the Nigerian people would have likely suffered catastrophic loss, as would the Defendants in this case.
The Judge did comment on the fact that there are a considerable number of serious questions left unaddressed following his judgment, for example, who was responsible for the fabrications and whether there was any criminal culpability. He suggested that these matters are likely to require further investigation. This is similar, in some ways, to the conclusion of the Nigeria case, which the Honourable Justice Knowles stated brought together a combination of examples of what some individuals will do for money. This evidently continues to be an issue.10
It is unlikely that this will be the last case concerning this kind of subject matter. Considering that generative artificial intelligence and technology generally are evolving faster than ever before, it will be interesting to see how the legal system will necessarily develop to address the challenge of ensuring the authenticity of documents put before the courts. This is particularly important where the Court has limited time to consider a matter, such as without notice applications. In this regard, the following comment of the Judge is particularly relevant:
"I recall considering this one with some care, in that I did not find it all very easy to understand. I gave, I would say in retrospect, undue allowance for difficulties apparently arising from documents being prepared by people who were not native English speakers and/or whose grasp of English procedure was not perfect. It did not, however, occur to me that any of the documents might be fabrications. I was not on the lookout for fraud, and did not suspect it. Understandably, at the time it did not occur to him that the documents may have been fabricated."11
As the sophistication of means to produce fabrications and forgeries improves, it is likely that the kinds of fabrication a judge may need to grapple with in the future are rather less crude than those at issue in this case and may no longer be discernible by the human eye. It is, therefore, of paramount importance that judges are equipped to handle, by way of their own judgment as well as by technological means, whatever means of deception the future may bring their way.
Judgment: Contax Partners Inc BVI v Kuwait Finance House (KFH-Kuwait) & Ors12
Footnotes
1. See this article
2. https://www.legislation.gov.uk/ukpga/1996/23/section/66
3. Paragraph 24 and 25 of the Judgment.
4. [2022] EWHC 669 (QB).
5. Paragraphs 40 to 44 of the Judgment.
6. Paragraph 44 of the Judgment.
7. Paragraph 16(1) of the Judgment.
8. Paragraph 446 of the Judgment.
9. https://www.judiciary.uk/wp-content/uploads/2023/10/Nigeria-v-PID-judgme...
10. Paragraph 52 of the Judgment.
11. Paragraph 9 of the Judgment.
12. https://www.bailii.org/ew/cases/EWHC/Comm/2024/436.html
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