Case Digest: Eletson Gas LLC v A Ltd [2025] EWHC 1855 (Comm)

<center>Judgment Date: 14 July 2025</center>

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Background

The case arose from applications under section 32 AA 1996. The claimant, Eletson Gas LLC (“EG”), sought a declaration that the fourth-to-eighth defendants (Group A) had the right to appoint an arbitrator on its behalf in London arbitrations concerning purchase options initiated by the first-to-third defendants. The ninth and tenth defendants (Group B) disputed this, asserting that they controlled EG and had appointed a different arbitrator.

Two issues came before the court: first, who controlled the common shares in EG held by Eletson Holdings Incorporated (“EHI”) and second, who controlled EG’s preferred shares. While the court accepted that Group A controlled EHI’s common shares, Group B relied exclusively on a JAMS arbitral award issued in a US-seated arbitration to argue that they controlled the preferred shares.

Recognition Under Section 101 Arbitration Act 1996

HHJ Pelling KC held that Group B could not rely on the JAMS award in the English proceedings because it had not been recognised under section 101 AA 1996. Section 101 provides that only recognised awards may be relied on in legal proceedings in England and Wales. Consequently, no issue estoppel could arise from the award as argued by Group B.

Suspension of the Award Under Section 103(2)

The court also addressed whether the award, even if recognised, would have been enforceable. HHJ Pelling KC concluded that recognition proceedings would likely have been stayed under section 103(2)(f) AA 1996, as the award had been “set aside or suspended” by competent authorities at the seat of arbitration. The US District Court had suspended the award to allow a challenge to proceed, while the US Bankruptcy Court had issued orders protecting creditors. Both courts qualified as “competent authorities” for the purposes of section 103.

Standing to Rely on the Award

The court further held that Group B lacked standing to seek recognition or rely on the JAMS award. The award had been made between EHI and two third parties associated with Group A and Group B, but not the same parties against whom recognition was sought in England. This lack of identity of parties was fatal to Group B’s reliance on the award.

Key Takeaways

The decision confirms that:

a New York Convention award must first be recognised under section 101 AA 1996 before it can be relied upon in English proceedings;
an award suspended by competent courts at the seat of arbitration falls within the scope of section 103(2)(f); and
parties who were not parties to the original arbitration cannot seek recognition or rely on the award in subsequent proceedings.

This judgment underscores the importance of formal recognition procedures for arbitral awards in England and clarifies the relationship between recognition, suspension and standing in the enforcement of foreign awards.

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