"Show me the money”: Enforcing Arbitration Awards
The views and opinions expressed here are solely those of the original author or contributor. These views and opinions do not necessarily represent those of the UK P&I Club.
In October 2017, the Supreme Court issued its judgment in Taurus Petroleum v SOMO  UKSC 64. The judgment laid down important principles for enforcement of international arbitration awards, especially in regards to Letters of Credit.
So what options are available to you when enforcing? Well, in England, a multitude of options (each with their own benefits/risks) are available. These include:
Applying to the court under s.66 Arbitration Act 1996 for enforcement of the award.
Obtaining a third party debt order (TPDO) against a letter of credit or the defendant’s bank account.
Applying for a Part 71 Order, which requires the defendant to disclose what assets they have and where (limited use in shipping disputes as limited to the jurisdiction of issue)
Applying for Receivership – which is expensive and therefore only suitable for high value claims.
Issuing a statutory demand and winding up.
In Taurus Petroleum, the Supreme Court approved the issuance of a TPDO for a foreign arbitration award against a Letter of Credit issued in favour of the debtor that had an English issuing bank (position would be the same if there was also an English confirming bank), even where the LoC in question was payable into a foreign bank account.
However, a TPDO against a Letter of Credit will not be granted if it is issued/confirmed: (1) by a foreign bank; (2) a foreign branch of an English bank; (3) Overseas branch of foreign bank that also has an English branch; (4) Foreign entity in a banking group that also included English entities in the wider group.
The judgment should now make it possible to enforce arbitral awards against Letters of Credit issued or confirmed by English banks, even where they are payable into an overseas account. Now for the next hurdle: tracking down the letters of credit!
This blog post is based on a talk given to the Club’s claims handlers by Alistair Wooder, counsel at 20 Essex Street.
The Link to the judgement can be found here
You may also be interested in:
QLU Spring 2017:The risks of delivering cargo against Letters of Indemnity.
The Philippines: Supreme Court decides that a seafarer's heirs are entitled to death benefits
The Supreme Court considers the POEA-SEC and rules that a seafarer’s heirs are entitled to death benefits for work related illness even if death occurs after the term of his employment contract.
QCR Winter 2018: Issuing and sending letter of credit through SWIFT on form MT700 – Party issuing the letter of credit the Issuing Bank? – Extrinsic evidence could be relevant
The claimant Yuchai Dongte, a Chinese manufacturer, sought payment pursuant to a letter of credit (LC) which it said had been issued by the defendant on 10 March 2014. The defendant provided financial services and was a member of the SWIFT network - a global platform for secure financial messaging using common standards and forms, but it was not a bank.
QCR Autumn 2020: Heirs of the late Manolo N. Licuanan v Singa Ship Management Inc. (G.R. Nos. 238261 and 238567)
The Philippines’ Supreme Court decides that a seafarer's heirs are entitled to death benefits.