Project Solartechnik Fund Fundz Inwestycyjny Zamkniety v Solas Bond Company DAC (Approved)

Factual and Procedural Background

This opinion concerns an application by the Applicant, a Polish company, seeking recognition and enforcement in Ireland of a Polish arbitral award dated 25th September 2024. The award was made against three Respondents: the first and third Respondents are Irish companies, while the second Respondent is a Polish company. The application is pursued only against the first and third Respondents.

The arbitration was conducted by Polish arbitrators, with the hearing on 14th May 2024 and the award issued on 25th September 2024. Following the award, the Applicant's Polish solicitors requested payment from the Respondents on 18th October 2024, and later the Applicant's Irish solicitors made a similar request on 15th November 2024, both without success.

Prior to the application, the third Respondent engaged solicitors (DLA Piper) to consider possible actions to address creditor interests, including the possibility of a scheme of arrangement under Part 9 of the Companies Act 2014. DLA Piper indicated to the Applicant's solicitors that enforcement proceedings were premature and could adversely affect creditors.

The enforcement application was issued on 2nd December 2024, supported by an affidavit sworn on 26th November 2024. On the initial hearing date, 18th December 2024, the first Respondent adopted a neutral position and did not appear, while the third Respondent raised procedural objections regarding the affidavit and absence of a certified arbitration agreement. The court adjourned the matter to 22nd January 2025 to allow the Applicant to remedy procedural deficiencies and for the third Respondent to file any opposition affidavit.

Subsequently, the Applicant filed supplemental affidavits addressing procedural issues. The third Respondent, through DLA Piper, declined to file a replying affidavit but consented to the application subject to an 8-week stay on enforcement to explore a scheme of arrangement. The Applicant did not consent to the stay.

At the resumed hearing, the third Respondent, represented by counsel, did not oppose the substantive application but refused to consent to enforcement without a stay. It indicated it would seek a stay if enforcement was granted, citing ongoing efforts to promote a scheme of arrangement, supported by funds raised in New York for a related company.

No stay was sought by the first Respondent, and the application was not pursued against the second Respondent.

Legal Issues Presented

1. Whether the Polish arbitral award should be recognized and enforced in Ireland against the first and third Respondents under the Arbitration Act 2010, the UNCITRAL Model Law, and the New York Convention.
2. Whether a stay on enforcement of the award should be granted to the third Respondent to allow exploration of a scheme of arrangement under Irish company law.

Arguments of the Parties

Applicant's Arguments

• The Applicant asserted entitlement to recognition and enforcement of the Polish arbitral award against the first and third Respondents, emphasizing the significant arbitral process leading to the award and the absence of any maintained grounds of objection.
• The Applicant opposed the stay sought by the third Respondent, arguing that finality should be achieved and that enforcement should proceed without delay.

Third Respondent's Arguments

• The third Respondent, via solicitors, initially contended the enforcement application was premature and could adversely impact creditors, proposing a scheme of arrangement as a preferable alternative.
• Procedural objections were raised concerning the form and manner of the Applicant's affidavit and absence of a certified arbitration agreement, though these were not pursued substantively at the hearing.
• Later, the third Respondent consented to enforcement subject to an 8-week stay to explore a scheme of arrangement, asserting this would benefit unsecured creditors and cause no prejudice to the Applicant.
• At the hearing, the third Respondent did not oppose the substantive application but refused to consent to enforcement without a stay, indicating it would seek a stay if enforcement was granted.

First Respondent's Position

• The first Respondent adopted a neutral position and did not oppose the application or seek a stay.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court found that the Applicant was entitled to recognition and enforcement of the Polish arbitral award against the first and third Respondents under the Arbitration Act 2010, Article 35 of the UNCITRAL Model Law, and Articles III and IV of the New York Convention. No substantive grounds of objection to enforcement were maintained by the Respondents.

The court considered the stay application by the third Respondent, which sought an 8-week delay to pursue a scheme of arrangement. Despite the third Respondent’s arguments and counsel’s submissions, the court was not persuaded that sufficient evidence demonstrated that the scheme was sufficiently advanced or that a stay would produce real benefit. The court noted the passage of over seven weeks since the initial correspondence about the scheme and the absence of updated supporting evidence.

Accordingly, the court refused to grant the stay, emphasizing the Applicant's right to finality and enforcement of the award without delay.

Holding and Implications

The court made the following DISPOSITION:

• The Polish arbitral award dated 25th September 2024 is recognized and enforced against the first and third Respondents as if it were a judgment of the High Court.
• Judgment is entered in favour of the Applicant against the first and third Respondents for the sums awarded, including principal, interest, and costs as specified in the award.
• The application is not pursued against the second Respondent, and no orders are made against it.
• The stay sought by the third Respondent on enforcement is refused, allowing immediate enforcement and judgment against that Respondent.
• The Applicant is entitled to costs against the first and third Respondents, to be assessed in default of agreement.

The decision ensures the Applicant can enforce the arbitral award promptly, without delay from procedural or interlocutory objections or attempts to seek a stay for restructuring purposes. The ruling does not establish new legal precedent but confirms the court’s approach to enforcement of foreign arbitral awards and the limited circumstances in which stays may be granted.