Ideas

Arbitration Report: November 2017

Firm Thought Leadership

Dear Reader,

In this issue of Baker Botts’ monthly Arbitration Report, authors Ryan Bull and Natasha Zahid discuss the recent DIFC Court decision on the application of sovereign immunity principles. The case is an important reminder regarding the inclusion of express waivers of sovereign immunity when contracting with states and state-owned entities. Authors Chris Caulfield and Kiran Unni discuss the UK Supreme Court’s decision laying down principles regarding the interception by an award creditor of funds payable to an award debtor under letters of credit.

We hope you enjoy reading these articles and invite you to provide any comments or feedback to the Editor.

Jonathan Sutcliffe
Editor

Pearl Petroleum Company Limited & Others v the Kurdistan Regional Government of Iraq [2017] DIFC ARB 003: Sovereign Immunity Issues From a UAE and English Law Perspective
Ryan E. Bull, Natasha Zahid

The case of Pearl Petroleum Company Limited v the Kurdistan Regional Government of Iraq (“Pearl Petroleum”), provides insights into the application of sovereign immunity principles in the UAE, which, unlike many jurisdictions, has not addressed sovereign immunity through legislation. The case broadly reinforces the importance to investors of including an express and broad waiver of sovereign immunity — both as to immunity from suit and immunity from execution — in agreements with states and state-owned entities.

To read the full article, click here.

UK Supreme Court Shows Flexibility in Enforcement of International Arbitral Awards
Taurus Petroleum Ltd v State Oil Marketing Co of the Ministry of Oil, Iraq [2017] UKSC 64

Chris Caulfield, Kiran Unni

The UK Supreme Court has laid down important principles for the enforcement of international arbitral awards and, specifically, for the interception by an award creditor of funds payable to an award debtor under letters of credit. An issuing bank’s London branch had undertaken to make payment to the award debtor (under an unrelated sale and purchase contract), under letters of credit, through a conduit account abroad in the name of a third party. The Court held that a promise to pay a debt to a named beneficiary via a nominated bank account in another’s name did not mean that the latter was substituted as beneficiary. The award creditor was, therefore, able to enforce its award against the debt which the Court regarded as property of the award debtor situated in England.

To read the full article, click here.


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