Shield or Sword? Pre-Emptive Non-Recognition of Awards in Germany and England

Can an award debtor against which an award has been rendered at the seat of arbitration, seek a declaration of non-recognition of the award in another state pre-emptively before the award creditor has brought an enforcement application in that state? Or is the award debtor confined to challenging the award at the seat of arbitration and defending against the enforcement application in another state once initiated by the award creditor? And, if the second approach is taken, should a court at the seat of arbitration issue an anti-suit injunction when the award debtor seeks a pre-emptive declaration of non-recognition in another state?

UK and German courts currently take fundamentally different positions on these questions. German courts follow the first approach while the UK courts have so far favoured the second approach. These contrary approaches are difficult to reconcile in practice. This was once again illustrated in a recent dispute. The High Court of England and Wales has issued an anti-suit injunction, against a German company which had applied in Germany for a pre-emptive declaration of non-recognition of an English arbitral award made against it.

The proceedings in the recent High Court case

The dispute arose between a Swiss and a German chemical company because the Swiss entity maintained that the parties had concluded a binding sales contract, with disputes to be resolved by arbitration seated in London. The German company denied that either a contract or an arbitration agreement was formed.

In a partial award on jurisdiction in May 2024, the sole arbitrator held that the parties had concluded a binding contract and arbitration agreement. The award was initially withheld from the parties pending payment of the arbitrator’s fees. This became significant, because under section 70(3) UK Arbitration Act, the 28-day-deadline for challenging the award starts running from the date on which the award was made (and not from the date on which the award was notified to the parties). 

The German company had paid its half of the costs, but the Swiss company initially refused to pay the other half. As a result, the award remained withheld while the 28-day challenge period continued to run. The Swiss company eventually paid the balance only the day before the challenge period expired. As a result, the award was notified to the parties only after expiry of the deadline.

From the publicly available facts, the reasons for running into an issue of an expiring deadline are unclear; one may only surmise that the German company may not have been informed that it would have needed to pay the outstanding fees itself to secure timely access to the award to contemplate and justify any challenge. The English courts subsequently refused both an extension of time for which the German company had already applied before expiry of the deadline and the German company’s challenge, holding that the company could have secured an earlier release of the award by paying the full amount itself. The award therefore became final and binding as a matter of English law.

In June 2025, the German company sought a pre-emptive declaration from the German courts that the award cannot be recognised, even though the Swiss company had not yet sought recognition or enforcement in Germany or elsewhere. The German company relied on a decision of the German Federal Court of Justice that had acknowledged that such an action is permissible.

The Swiss company, in turn, applied to the English Commercial Court for an anti-suit injunction restraining the German company from pursuing the German proceedings. The anti-suit relief was granted in September 2025 and was only recently published. Relying on the Court of Appeal’s reasoning in Star Hydro, the Commercial Court held that the choice of London as the seat meant that challenges to the award could only be brought through the procedures provided by English law. 

The consequence is that the German company is de facto impeded in availing itself of a remedy available under German law that has legal effect only in Germany.

Two procedural models

This case must be assessed against earlier case law on this issue, which is still developing in the UK. 

Under German law, a pre-emptive invocation of non-recognition grounds is permissible. In March 2023, in case no. I ZB 33/22, the German Federal Court of Justice held that a party facing potential exequatur proceedings in Germany may seek a declaration that a foreign award is not to be recognised in Germany, even before any application for recognition or enforcement has been filed by the creditor. 

The Federal Court of Justice based that remedy on an analogous application of section 1062(1) no. 4, second alternative, and section 1061(2) ZPO. It ruled such an action is permissible because the New York Convention leaves procedural questions in relation to the recognition and enforcement of a foreign award to the court seized. The rationale for such pre-emptive declaratory relief is mainly one of effective legal protection for the award debtor, coupled with considerations of procedural efficiency. If an award will not be enforceable in Germany, there may be commercial value in establishing that position early. From a German perspective, this is a non-recognition decision that produces legal effect only in Germany and it is not akin to a challenge of the award at the seat of arbitration. For these purposes, a decision at the seat of arbitration regarding the validity of the award is not binding on German courts, which must perform their own analysis.

The UK courts, on the other hand, have taken a different stance: in Star Hydro v National Transmission, the Court of Appeal held in July 2025 that, for a London-seated award, challenges must be brought before the supervisory court and through the routes provided by the Arbitration Act 1996. The Court of Appeal considered that if the grounds for non-recognition and non-enforcement could be invoked pre-emptively in another jurisdiction, the supervisory role of the courts at the seat could be undermined. Thus, pre-emptively seeking non-recognition abroad constitutes a breach of the arbitration agreement that conferred supervisory power on the UK courts alone by agreeing an English seat for the arbitration. Furthermore, the Court of Appeal emphasised that the grounds for non-recognition under Article V of the New York Convention are framed as a defence – “a shield”, not “a sword by which the award may be attacked pre-emptively”.

Outlook: how far can the shield reach?

The current position underlines a practical divergence between the UK and Germany. Under German law, pre-emptive non-recognition proceedings in a secondary jurisdiction are considered permissible to promote effective legal protection of the award debtor. As such, these proceedings constitute a “shield” against the award. By contrast, UK courts have characterized such pre-emptive action differently: as an action akin to a challenge of the award and therefore as a “sword” falling within the exclusive supervisory jurisdiction of the courts at the arbitral seat. The German and UK courts also diverge in their interpretation of the New York Convention as to whether it allows such pre-emptive non-recognition actions. 

The UK position on this issue is not yet final. On 15 and 16 June 2026, the UK Supreme Court heard the appeal in the Star Hydro case and will soon decide whether to uphold the Court of Appeal’s view and whether an anti-suit injunction is appropriate in the circumstances.

For now, the approach of the UK courts places an obstacle in the way of an award debtor seeking to avail itself of a remedy available in Germany, which German courts regard as a shield against enforcement of an English award. The practical consequence for award debtors is that they should, of course, primarily try to challenge the award before the courts at the arbitral seat. A successful annulment remains the most effective way to resist enforcement actions in any state. Regardless of the outcome of such a challenge, the award debtor can also defend itself against any enforcement action in another state. Only a pre-emptive legal remedy against an English award is practically more difficult to obtain. At the same time, parties should be mindful when considering their strategy that some jurisdictions – such as Germany – may allow for pre-emptive non-recognition actions even before the award creditor initiates enforcement proceedings.