The Court of Appeal has confirmed that a declaratory award under section 66 of the Arbitration Act can be enforced by the English courts in the same manner as a judgment.

In West Tankers Inc v Allianz SpA and another [2012] EWCA Civ 27,  the Court of Appeal upheld the first instance decision of Field J in which the court enforced a declaratory arbitral award under s.66 of the Arbitration Act 1996 (see our previous blog here). Section 66 states that an arbitral award may “be enforced in the same manner as a judgment or order of the court to the same effect“. The insurers argued on appeal that as a declaratory judgment was not coercive and did not force a party to do anything, it therefore could not be “enforced” in the normal sense of the word. As a result, they argued, a declaratory judgment did not come under section 66.

Toulson LJ rejected this narrow construction of “enforced” and said that even a negative declaratory award could be enforced because this fits with the way arbitration works, drawing on assistance from the judicial system to ensure the efficacy of an award. The insurers’ argument about the meaning of “enforced” was “an over-subtle and unconvincing distinction and sits on a shaky foundation,” Toulson LJ said. He added, “Judges may give force to an arbitral award by a number of means,” including by issue estoppel or res judicata.

This is the latest decision in the long-running litigation between the parties, stemming from damage caused by one of West Tanker’s ships to a jetty at an oil refinery in Italy in 2000. After arbitration was started in London, the subrogated insurers brought court proceedings in Italy. West Tankers sought and obtained an anti-suit injunction from the English High Court to restrain the Italian proceedings, but this was discharged following an ECJ ruling that it would be incompatible with EC Regulation 44/2001 for an anti-suit injunction to enforce an arbitration agreement. For further details of the facts, please see our previous blogs in relation to the anti-suit injunction here.

This Court of Appeal decision confirms that all arbitral awards, including declaratory arbitral awards, are on a par with court decisions under English law as they can be enforced by the courts in the same way. However, it does not address the issue of how to deal with conflicting judgments from different EU countries. This may occur because the Brussels Regulation as currently drafted contains no mechanism to co-ordinate its jurisdiction, which includes an exemption for arbitration, with the jurisdiction of national courts in relation to arbitration. The Brussels Regulation is currently under review to address this. If the Italian court hands down a judgment which conflicts with the underlying arbitral award, then this issue will need resolving soon.