Soleimany v Soleimany [1998] 3 WLR 811, [1999] QB 785 (CA)

Facts

Sion Soleimany (hereinafter referred to as the father) and his son, Abner Soleimany (refers as the son) were engaged in the export of Persian carpets from Iran. Between 1980 and 1983, the son arranged for the export of the carpets from Iran in contravention of Iranian Revenue laws and export controls. The carpets were sold by the father in England or elsewhere outside Iran.

Disputes arose between the father and the son relating mainly to whether the son had received what he claimed was due to him from the proceeds of the sale of the carpets that he alleged to have arranged to export from Iran.

Both the father and his son, agreed to submit the dispute to arbitration by the Jewish Beth Din, the court of the Chief Rabbi. According to a leaflet provided by the Beth Din, the system of law to be appied by the Beth Din is Jewish law, albeit “sometimes other systems of law may also be relevant…by way of the doctrine of incorporation…” but the decision as to which law to apply “is that of the Dayanim…”.

Award

In the award made by the Beth Din on 23 March 1993, it was noted “The son purchased quantities of carpets and exported them illegally out of Iran.” The award further recognized that the activities in Iran were illegal, stating, e.g., that “By the very nature of the illicit enterprise, few records were kept….In assessing profits the award disallows the full sum claimed by the son on the basis inter alia that no allowance has been made for ‘smugglers’ fees’.” After assessing the son’s share of the profits, the Dayan awarded him UK 576,574 pounds and his costs.

Courts Procedures

1. Court of first instance

After the award was made the son applied to register the award as a judgment under Sect. 26 of the Arbitration Act 1950 as his father dad failed to comply with it. On 4 May 1993, Master Gowers granted leave to enforce the award.

The father applied to set aside the leave for enforcement on the ground that the illegality which was at the root of the enterprise rendered the claim void or unenforceable in an English court, and that it would be contrary to public policy for an award founded on an illegal agreement or transaction to be enforced as a judgment.

The father also sought leave to appeal the award in several instances, but was unsuccessful in this respect. However he was successful regarding the application to set adide the leave for enforcement of the award.

2. Court of Appeal

The Court of Appeal, per Morritt, LJ, Waller, LJ and Sir Christopher Staughton, held that the award, which purported to enforce an illegal contract, was not enforceable in England and Wales.

 

 

Source: http://arb.rucil.com.cn/enarticle/default.asp?id=184