Wish upon a Star: Court of Appeal asserts supervisory jurisdiction and injuncts foreign proceedings amounting to challenge to London award

6 August 2025

In Star Hydro Power Limited v National Transmission and Despatch Company Limited, the Court of Appeal asserted the supervisory jurisdiction of the English courts in London-seated arbitrations and resisted what it characterised as an attempt to subvert that jurisdiction through the seeking of "partial enforcement" in Pakistan.

The Court of Appeal, overturning the judgment of Dias J in the High Court, granted an anti-suit injunction to restrain National Transmission and Despatch Company Limited's (the "Respondent" or "NTDCL") attempt to "partially enforce" an Award in Pakistan, the effect of which (it held) would have amounted to a challenge to the Award itself. However the action in Pakistan might have been described, the Court of Appeal looked to its substance (a challenge to enforcement) rather than its form (an action to partially enforce an Award under the New York Convention 1958) in determining whether the English courts should exercise their supervisory jurisdiction.

Background

The Respondent operates the electricity network of Pakistan. Star Hydro Power Limited (the "Appellant" or "SHPL") entered into a Power Purchase Agreement with the Respondent in early 2012 relating to the construction, operation and maintenance of a new hydro-electric power plant. The PPA set a tariff, that would be paid to SHPL by reference to an estimated project cost of around $360 million. Ultimately, SHPL sought an adjustment to the project cost to around $420 million, with a corresponding increase to the tariff.

While the contract set the tariff as between the parties, it was common ground that a separate statutory body, NEPRA, held the exclusive responsibility for determining electricity tariffs paid by consumers. In July 2020, NEPRA issued a decision reducing the project cost to around $326 million and only modestly increasing the tariff (compared with what SHPL sought).

In March 2021, SHPL issued a Notice of Dispute and subsequently commenced a London-seated arbitration under the LCIA Rules seeking to be paid a tariff rate of 10.6736 PKR/kWh under the contract (around 2.3 PKR/kWh above the rate identified by NEPRA).

In the arbitration, SHPL substantially succeeded as the sole arbitrator held that: (i) he had jurisdiction to hear the claims, which were admissible; (ii) on a proper construction of the PPA, the Project Cost was $378,312,000 and the tariff was 10.3632 PKR/kWh; (iii) NTDCL should pay SHPL the difference between what had been paid and the tariff it was entitled to receive; (iv) interest was payable on sum specified above, legal and arbitration costs and on late or outstanding invoices issued by SHPL; (v) all other claims and requests for relief were dismissed and denied.

In August 2024, the Respondent issued an application in the Lahore High Court in Pakistan, which it described as an application for partial recognition and enforcement of the Award. Enforcement was sought primarily in respect of the single dispositive section at the end of the relief granted (point (v) above). Significantly, the application did not seek enforcement of the orders and declarations that SHPL was entitled to a higher tariff rate as a matter of contract. In fact, the Respondent stated in its application that the Arbitrator "broadly upheld the positions advanced by NTDCL and had made salient findings and declarations" stating that the "natural and necessary consequence" of the findings was that the Arbitrator did not have jurisdiction (despite a declaration to the contrary in the Award). NTDCL asserted that the Award as a whole was not enforceable by reason of Articles V(2)(a) and (b) and V(1)(a) and (c) of the New York Convention.

The Lahore High Court made an interim order that suspended the operation of demand notices sent by SHPL to NTDCL that the sole arbitrator had ordered to be paid.

SHPL subsequently commenced a claim for anti-suit relief in the Commercial Court in London, which was initially rejected on grounds that the English Courts would not "police" a pre-emptive partial enforcement of an Award under the New York Convention in another jurisdiction.

Interestingly, NTDCL had previously sought to challenge a separate LCIA award in favour of different parties under similar agreements by claiming that the courts of Pakistan (where the award was challenged) had concurrent jurisdiction alongside the English Courts, in which an anti-suit injunction was sought. It is notable that Phillips LJ (giving the lead judgment in the Court of Appeal in the present case) had been the first instance judge in that earlier case and had enforced the exclusivity of English Courts as the supervisory jurisdiction of the arbitration.

Decision

Giving the unanimous judgment of the Court of Appeal, Phillips LJ overturned the High Court's decision, making the following key points:

Where parties have agreed that London is the seat of an arbitration, the English Courts have exclusive supervisory jurisdiction over challenges to the award (following previous authority in C v D [2007] EWCA Civ 1282).
The effect of this was that any challenge to an award must be brought in the English Courts, not in another place.
NTDCL's proceedings in Lahore were in substance a pre-emptive challenge to the award's validity and an attempt to nullify its effect.
As such, the proceedings were brought in breach of the arbitration agreement and the exclusive supervisory jurisdiction of the English Courts.

The judge provided further useful commentary on the New York Convention, noting that "challenges" to enforcement of an award under the Convention – such as the Article V grounds relied on by the Respondent – were "a shield against applications for the recognition and/or enforcement of an award, not a sword by which the award may be attacked pre-emptively". To construe Article V otherwise would, in the Court's opinion, "entirely undermine the role of the supervisory court as the exclusive jurisdiction for such challenges". In coming to its conclusions, the Court was keen to emphasise that its jurisdiction was being exercised against NTDCL as a party under its supervision through the arbitration. The Court was not, it emphasised, directing a foreign court as to how it should address matters of recognition and enforcement.

Comment

This judgment is fundamentally grounded in a principle familiar to English contract lawyers: the Court's focus on substance over form. The key difference between the Court of Appeal and the High Court rested on the higher court's refusal to accept the Respondent's characterisation of the Lahore proceedings at face value, instead interrogating their true effect - an attempt to challenge an award outside of the courts of the seat.

As the Court of Appeal made clear, Article V of the New York Convention operates defensively - it may be invoked to resist enforcement, but not to launch a pre-emptive challenge in a foreign court before enforcement is sought. Allowing such a use would undermine both the finality of awards and the role of the supervisory court at the seat of arbitration.

The Court’s approach provides welcome reassurance to commercial parties who select London as a seat, reinforcing the exclusivity of the seat court’s jurisdiction over award challenges.

A practical takeaway for successful parties in arbitration is the importance of considering promptly when to commence recognition and enforcement proceedings. While there are plainly cost implications and jurisdictional considerations, acting promptly at the seat of arbitration may make it easier to resist certain challenges brought in foreign courts.

Star Hydro Power Limited v National Transmission and Despatch Company Limited [2025] EWCA Civ 928