The Cayman Islands Court of Appeal has enforced an ICC award made in favour of a Brazilian airline and upheld by the Brazilian courts in annulment proceedings in Brazil brought by the award debtors, subject to a stay pending the conclusion of the Brazilian proceedings.
Rix JA (with whom Goldring P and Martin JA agreed) dismissed the respondents’ argument that enforcement should be refused on grounds of public policy or lack of due process as a result of the tribunal basing its decision on arguments that the parties had not pleaded. He instead found that in order to prevent the enforcement of a foreign arbitration award on the basis of public policy due to the doctrine of iura novit curia (“the court knows the law”), application of the doctrine must have resulted, among other things, in a “serious irregularity”. That civil law doctrine holds that after an arbitral tribunal has ascertained the facts, it will provide its own view of the law, which is a principle that the Court of Appeal acknowledged does not sit comfortably with common law practitioners, who usually expect to be heard on new points of law.
In this case, there was no serious irregularity justifying a refusal to enforce and the court took into account that the doctrine was well-recognised in various civil law jurisdictions, including by the Brazilian Court of Appeal which had upheld the award.
This update was originally published on Practical Law Arbitration and is reproduced with the permission of Thomson Reuters.