Author: Otto Sandrock*
Published: December 2012
Seven years ago, Professor Hans Smit asked the question: When is a government bound by a contract, including an arbitration clause, it did not sign? In view of the then highly debated case Bridas I, Professor Smit concluded that the time was ripe for the U.S. Supreme Court to take the matter in hand. The Supreme Court, however, declined to grant certiorari to Bridas I. Instead, in November 2010, the UK Supreme Court handed down a judgment on exactly that issue. Very recently Professor George A. Bermann drew our attention to that judgment, rendered in the matter of Dallah Real Estate and Tourism Holding Company v. Ministry of Religious Affairs, Government of Pakistan. Thus, we are faced now with a decision of the UK Supreme Court on a legal issue on which, about seven years ago, the U.S. Supreme Court had refused to rule. The new decision of the UK Supreme Court is full of in-depth analyses and replete with persuasive results – with one exception, however. In addition, it must be added at the outset that the UK Supreme Court rendered its decision, not on the basis of English, but of French arbitration law.
*Emeritus of the Law School of the University of Muenster; attorney in Duesseldorf; counsel at Orrick Hoelters & Elsing, Duesseldorf. The views expressed in this article are those of the author alone and should not be understood as reflecting the views of Orrick Hoelters & Elsing.