17/12/2009 - Court of Appeal rules that a Spanish court judgment on the existence of an arbitration agreement requires recognition in England

Following a three day hearing, The Court of Appeal unanimously allowed an appeal by Endesa  Generacion SA against a judgment of Mrs Justice Gloster.  Endesa,  a Spanish company, sued shipowners in Spain for breach of a contract to deliver coal. The shipowners contended that an arbitration clause contained in a charterparty was incorporated into the bill of lading. The Spanish court rejected this assertion. The shipowners started English proceedings seeking a declaration that the arbitration agreement was binding on Endesa. The judge made a finding to this effect as a matter of English law. She also held that although the judgment of the Spanish court was a Regulation judgment, it did not require recognition in the English proceedings and that, even if it otherwise did, it  would be contrary to public policy to  recognise it.

The Court of Appeal confirmed that the Spanish judgment was a Regulation judgment and, allowing Endesa's  appeal, held that the judgment did require recognition under the Regulation notwithstanding that the proceedings before the English court were proceedings concerned with arbitration and were themselves outside the Regulation. The Court further held that such recognition was not contrary to public policy. Thus an issue estoppel precluded the English court from ruling on the existence of the arbitration agreement and going behind the finding of the Spanish Court.