"The end of the road has been reached as regards all challenges": English Commercial Court dismisses application for stay of execution and enforcement

Introduction

In Deinon Insurance Brokers LLC v Reen [2025] EWHC 1263 (Comm), the English High Court refused an application by the defendants in underlying arbitrations ("the Defendants") to stay execution and enforcement of certain orders made in favour of Deinon Insurance Brokers ("Deinon") concerning those arbitral awards.

Background

The underlying dispute concerned the Defendants' liability to repay Deinon, a company providing insurance and re-insurance services. Sole arbitrators in separate arbitrations against each of the Defendants had found respectively that the Defendants were liable to repay Deinon certain sums and interest under loan arrangements.

Deinon secured permission to enforce those awards under section 66 of the Arbitration Act 1996 ("the 1996 Act"). The Defendants' s68 and s69 applications were rejected and leave to appeal those decisions, as well as an ancillary set-aside application, was also refused.

Money judgments were entered for Deinon in the terms of the awards. The Defendants sought a stay of these judgments alleging a 'real risk of prejudice' to them if they were enforced. This was argued on the basis that (1) Deinon was currently under the control of a person who wrongly claimed to be Deinon's beneficial owner; (2) Deinon's true beneficial owner was Mr Daster (the brother-in-law of one of the Defendants); (3) Mr Daster had issued proceedings in Dubai to prove this ("the Dubai Proceedings"); and (4) if those proceedings succeeded, Mr Daster would not enforce any of the awards. Therefore, paying money to Deinon would allow the current owner of Deinon to purportedly misappropriate and dissipate the monies.

Decision

The court's power to stay execution stems from CPR 83.7, which applies in all cases where a party seeks a stay of execution of a money judgment. This power is discretionary and any applicant must prove there are 'special circumstances' rendering enforcement inexpedient. Ultimately, the court refused to exercise this power for the following reasons:

• First, to order a stay where the debtor is essentially seeking to re-argue the subject matter of the final and binding judgment would conflict with the principles underlying the 1996 Act providing for (i) the fair resolution of disputes without unnecessary delay or expense (section 1(a)) and the final and binding nature of an arbitral award (section 58(1)).
• Second, the court must be 'astute' to avoid direct and indirect attacks on awards. This includes conduct that is, 'in substance if not in form', an indirect attack on a final and binding award, or conduct that seeks to 'frustrate or delay its enforcement'. This means that an English award debtor or judgment debtor as a result of an English-seated award can only avail themselves of the remedies permitted under the 1996 Act. Invoking the Dubai proceedings as special circumstances to support a stay of execution was 'plainly… [a] manufacture[d]… defence against the execution of the Awards and the consequent Orders'.
• Finally, the court pointed out that the Dubai Proceedings had already been expressly rejected by the arbitrator in one of the underlying arbitrations, again indicating that alongside the stay application, this was merely 'a device created to put off the time when Deinon… actually receives the sums'.  

Consequently, there were no special circumstances that could justify a stay of execution.

Comment

This decision illustrates the English courts' practice of preferring substance over form when considering attempts to circumvent arbitration awards. The judge repeatedly emphasised that a stay would not be granted if the outcome would be to allow a debtor to seek a stay by 'engineering events', or to conduct what is 'in substance a collateral attack' on the arbitral award. What constitutes a collateral attack will be considered on a case by case basis and thus there is no definitive criteria, but the decision in C v D [2007] EWHC 1541 – which is frequently cited in cases involving alleged collateral attacks – suggests that attempting to nullify the result of an arbitration via foreign proceedings may be paradigmatic of oppressive conduct amounting to a collateral attack.

Although "collateral attack" is not itself mentioned in the 1996 Act, it has been considered as grounds for an anti-suit injunction to restrain overseas proceedings (see also here) as well as an anti-arbitration injunction. This flows from the fact that the 1996 Act has express provisions which deal with challenges to awards, such that a collateral attack is considered an attempt to undermine those strictures. Consequently, the court emphasised that 'failing full payment, Deinon should be free to invoke the full enforcement machinery available to it in this jurisdiction'.

The authors would like to thank Kristy Chan for her contribution to this post.