Introduction
In Star Hydro Power Limited v National Transmission and Despatch Company Limited [2025] EWCA Civ 928, the Court of Appeal unanimously allowed an appeal granting an anti-suit injunction restraining the respondent from pursuing proceedings related to a London-seated arbitral award in Lahore, Pakistan. The Court clarified that while the New York Convention governs the recognition and enforcement of foreign arbitral awards, it does not permit a party to bring pre-emptive challenges to a London-seated arbitral award in foreign jurisdictions. The English courts maintain exclusive supervisory jurisdiction over such challenges under the Arbitration Act 1996 (recently replaced by the Arbitration Act 2025), with the New York Convention operating only as a shield in recognition and enforcement proceedings in other jurisdictions. This judgment underscores the English courts' emphasis on respecting parties' choice of arbitral seats and preserving the curial court's role in regulating challenges to awards made under its supervision.
Background
The underlying dispute arose from a Power Purchase Agreement (PPA) between Star Hydro Power Limited (SHPL), a South Korean-owned power producer, and National Transmission and Despatch Company Limited (NTDC), a Pakistan state entity and the power purchaser. Under the PPA, SHPL constructed and operates a 147-MW hydroelectric plant, selling electricity to NTDC based on a set tariff. The PPA included a reference tariff during the construction stage, which was subject to adjustments (based on detailed provisions in the PPA linked to project costs and other factors) after the plant achieved its commercial operation date (COD). When SHPL sought an adjustment to the tariff post-COD, Pakistan's regulator, the National Electric Power Regulatory Authority (NEPRA), rejected most adjustments and made deductions to the project costs. After pursuing review options, SHPL commenced London-seated LCIA arbitration under the PPA, seeking declarations from the tribunal as to the project costs and correct COD tariff, and claiming tariff payments from NTDC based on the correct COD tariff. NTDC disputed the claim on several grounds, including a jurisdictional objection that tariff determinations were exclusively within NEPRA's jurisdiction and that SHPL's claim improperly circumvented the regulatory framework.
In May 2024, the tribunal determined the correct project costs and COD tariff based on the proper application of the PPA, and found that SHPL was contractually entitled to the shortfall in payments it should have received had the correct COD tariff been applied (the Final Award). The tribunal also found that NEPRA had already performed its regulatory function by approving the tariff-setting mechanism in the PPA. In August 2024, NTDC filed ex parte proceedings in the Lahore High Court purportedly seeking partial recognition and enforcement of the Final Award (the Lahore Proceedings) under Pakistan's domestic legislation implementing the New York Convention. NTDC asked the court to recognise and enforce only the portions of the Final Award it claimed were in its favour, while seeking non-recognition and non-enforcement of the declarations and orders in the dispositive section of the Final Award that were in SHPL's favour. NTDC also sought an order to permanently restrain SHPL from issuing invoices that were not based on NEPRA's published tariff (the Application). The Lahore High Court granted an interim order on the same day suspending SHPL's demand for payment sent pursuant to the Final Award.
Commercial Court proceedings
In September 2024, SHPL applied to the English Commercial Court for an interim anti-suit injunction to restrain NTDC from pursuing the Lahore Proceedings. The Commercial Court identified three questions to be resolved: (1) the allocation of jurisdiction under the New York Convention, (2) the true substance of NTDC's application in Pakistan, and (3) whether it was appropriate for the English courts to intervene by an anti-suit injunction.
The Commercial Court refused to grant the interim anti-suit injunction, finding, inter alia,that:
- the English courts do not a have a "policing role" over foreign recognition and enforcement proceedings relating to a London-seated award;
- the substance of the Application was for the Lahore court to decide, but did not amount to a root and branch attack on the Final Award;
- there was no bar to a losing party in an arbitration pre-emptively challenging the recognition and enforcement of an award under Article V of the New York Convention; and
- principles of comity required the English courts to trust Pakistani courts to apply the New York Convention properly.
SHPL appealed the decision and was granted permission to appeal on the grounds that the Commercial Court erred in:
- finding that the New York Convention can be used pre-emptively to challenge an award;
- its approach to characterising the Application, which as a matter of substance should have been properly characterised as amounting to a breach of the arbitration agreement; and
- finding that the Application did not seek to undermine the Final Award.
The Court of Appeal's Decision
The Court of Appeal unanimously allowed the appeal and granted the anti-suit injunction largely on the terms sought by SHPL. The Court's reasoning focused on four main points.
(i) Exclusive supervisory jurisdiction of the courts of the seat
The Court reaffirmed the established principle, rooted in C v D [2007] EWCA Civ 1282 and applied in Atlas Power Ltd v NTDC [2018] EWHC 1052 (Comm), that an agreement designating the seat of arbitration "constitutes an agreement as to the 'curial law' of the arbitration and is analogous to an exclusive jurisdiction clause in favour of the courts of the jurisdiction of the seat, the 'supervisory' jurisdiction". This exclusive jurisdiction persists even where the governing law of the contract is foreign law.
The Court emphasised that this exclusivity extends to post-award challenges. It noted that English courts are obliged to enforce the arbitration agreement by preventing parties from pursuing collateral attacks on an award in foreign courts. The judgment referred to the Supreme Court's recent decision in UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30, reaffirming The Angelic Grace, recognising the practice of granting anti-suit injunctions to enforce arbitration agreements without undue hesitation. The Court noted that the "approach applies with even more force to court proceedings brought to challenge or invalidate an arbitration award in a foreign jurisdiction when England and Wales is, as the jurisdiction of the seat of the arbitration, the supervisory (and therefore exclusive) jurisdiction for such challenges."
(ii) The role of the New York Convention
The Court considered the New York Convention's purpose and scope, noting that it is a framework facilitating the recognition and enforcement of foreign arbitral awards in secondary jurisdictions (i.e. not the jurisdiction where an award is made). The Court observed that the New York Convention does not create standalone jurisdiction to challenge awards independently or pre-emptively before enforcement proceedings are brought. Rather, Article V of the New York Convention permits parties to resist recognition or enforcement only once an award has been invoked against them. The Court therefore rejected the Commercial Court's decision, holding that "[i]t is apparent... that 'challenges' to an award under the New York Convention are a shield against applications for the recognition and/or enforcement of an award, not a sword by which the award may be attacked pre-emptively."
The Court concluded that the Application, which expressly challenged the validity of the Final Award, could not be said to have been properly made under the New York Convention and was a breach of the arbitration agreement.
(iii) Substance of the Lahore Proceedings
The Court carefully scrutinised the substance of the Application and found that, although it was presented as an application for partial recognition and enforcement under the New York Convention, it essentially represented a substantial challenge to the central determination of the Final Award that NTDC was liable to pay to SHPL certain sums as a matter of contract. This was evidenced by the declarations NTDC sought: undermining key aspects of the Final Award and requesting broad injunctions restraining SHPL from issuing invoices based on the contractually correct COD tariff.
The Court found that the Application was a substantive attempt to nullify the Final Award, which amounted to a breach of the arbitration agreement and infringed the English courts' exclusive supervisory jurisdiction. NTDC's offer during the hearing to narrow the relief sought in the Application did not alter the underlying objective, which remained to effectively invalidate the Final Award.
(iv) Anti-suit injunctions and Comity
The Court rejected the lower court's finding that the English courts have no role where a party attempts to challenge a London-seated award in a foreign court under the guise of proceedings brought pursuant to the New York Convention. The English courts' exercise of their supervisory jurisdiction in such cases is not a matter of exerting any power or control over the foreign court's legitimate exercise of its jurisdiction. Instead, the English courts seek to prevent a party from breaching the arbitration agreement (and undermining the exclusive jurisdiction of the supervisory court) by improperly pursuing foreign proceedings. The judgment highlighted that exercising this jurisdiction in personam over the offending party does not offend international comity.
Comment
The decision reinforces the role of the arbitral seat's courts in supervising and ensuring the integrity of arbitral awards. It emphatically rejects attempts to sidestep this supervisory jurisdiction by creatively labelling challenges to awards in a foreign jurisdiction as applications properly made under the New York Convention. The judgment preserves the predictability and stability that parties expect when choosing London as their seat of arbitration.
Practically, this case serves as a cautionary note for parties contemplating multi-jurisdictional enforcement or challenge strategies. Arbitration agreements with well-chosen seats confer valuable exclusive supervisory jurisdiction that courts will protect vigorously. Parties and practitioners should be wary of the limits of the New York Convention and the importance of bringing any substantive attacks on an award exclusively before the supervisory court. The decision also provides reassurance that English courts will not permit jurisdiction-shopping tactics designed to unravel London-seated awards with strategic challenges in New York Convention states.
Overall, this judgment contributes significantly to the coherence of arbitration jurisprudence by safeguarding the exclusive supervisory role of the seat's courts and clarifying the proper use of the New York Convention as a mechanism strictly for enforcing or resisting enforcement after an award's issuance.
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