English Court of Appeal reinforces limits of New York Convention in Star Hydro v NTDCL

The Court of Appeal has granted an anti-suit injunction blocking foreign proceedings that threatened to challenge a London-seated arbitral award. In Star Hydro Power Limited v National Transmission and Despatch Company Limited [2025] EWCA Civ 928, the appeal court also made helpful comments on the purpose and scope of the New York Convention.

The arbitral award

The case arose from a dispute under a power purchase agreement between Star Hydro Power Limited (SHPL) and National Transmission and Despatch Company Limited (NTDCL). An LCIA tribunal awarded SHPL damages based on a higher, contractual rate for the purchase of electricity rather than the rate set by Pakistan’s regulator.

NTDCL’s application in Pakistan

NTDCL subsequently initiated proceedings in Lahore, purporting to seek partial recognition and enforcement of the award under the New York Convention (while simultaneously requesting that the aspects of the award in favour of SHPL be declared a nullity).

NTDCL argued that the tribunal’s finding would usurp the exclusive jurisdiction of the Pakistani regulator and thus violate Pakistani law. It said the award was not enforceable under Article V of the New York Convention, for reasons including that recognition of the award would be contrary to Pakistani law and public policy.

The Court of Appeal decision

The English High Court refused SHPL’s application for an anti-suit injunction to restrain the Lahore proceedings. The court accepted that the New York Convention permitted pre-emptive challenges to enforcement, and that NTDCL’s application did not in reality amount to a “root and branch” attack on the award.

The Court of Appeal disagreed. Although the Lahore proceedings were framed as an application for recognition and enforcement, the only order of the award that NTDCL sought to “recognise and enforce” was the standard catch-all dismissal of any other claims for relief. The proceedings were in fact, properly characterised as a “full throated” challenge to the award, not an enforcement action, and were brought in breach of the arbitration agreement. As such, the appeal court granted an anti-suit injunction.

Key lessons from the Court of Appeal’s judgment are:

1. Supervisory jurisdiction is exclusive: The appeal court reaffirmed that the seat of arbitration determines the exclusive jurisdiction for challenges to the award. England, as the seat, retained sole authority under the Arbitration Act 1996 to hear such challenges.
2. Convention as a shield, not a sword: Article V of the New York Convention provides grounds to resist enforcement, not proactively to challenge an award. The Convention does not permit pre-emptive attacks in foreign courts.
3. Anti-suit injunctions may be appropriate: Where foreign proceedings undermine the arbitration agreement or the supervisory court’s jurisdiction, English courts will intervene to uphold the parties’ contractual commitments.
4. Partial recognition must be genuine: Attempts to disguise challenges as partial enforcement under the New York Convention will be scrutinised. Courts will assess substance over form.

The judgment reinforces the primacy of the arbitral seat and limits misuse of the New York Convention to circumvent arbitration outcomes.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, August 2025