Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan

This appeal arises from Dallah Real Estate and Tourism Holding Company’s attempt to enforce in England a final award made in its favour by an ICC arbitral tribunal against the Government of Pakistan. The Government had resisted enforcement on the ground that the arbitration agreement was not valid under French law, the law of the country where the award was made. The Supreme Court had to determine whether the Government had proved that there was no common intention (applying French law principles) that it should be bound by the arbitration agreement. The Court held that the Government had proved that there was no such common intention. The crucial facts were that Dallah was advised by a leading firm of lawyers in Pakistan, which drafted the Memorandum of Understanding and the Agreement, and that there was a clear change in the proposed transaction from an agreement with the State to an agreement with the Trust. The Agreement was plainly an agreement between Dallah and the Trust, and the Government was referred to in the Agreement only in its capacity of guarantor of loans to the Trust. The Trust was the one which commenced proceedings against Dallah in Islamabad. The termination letter was written on Ministry of Religious Affairs letterhead and signed by the Secretary of the Ministry, but it was written on behalf of the Trust and in ignorance of its dissolution. Consequently, on a proper application of French law as mandated by the New York Convention and the 1996 Act there was no material sufficient to justify the tribunal’s conclusion that the Government’s behaviour showed and proved that the Government had always been, and considered itself to be, a true party to the Agreement and therefore to the arbitration agreement. The Supreme Court dismissed the appeal.