Dallal v Bank Mellat [1986] QB 441

Dallal claimed before the Iran US CTR a sum of $400,000 on the basis of two dishonoured cheques drawn on the International Bank of Iran, the predecessor of Bank of Mellat, both were Iranian government instrumentalities. The tribunal held that the cheques, issued at the time of the Iranian revolution, were strong suspicious of being part of foreign exchange contract illegal under Iranian law and unenforceable under Bretton Woods (US & Iran were parties). The Tribunal disallowed the claim. Dallat commenced proceedings in UK against the bank that had offices in London, the Bank alleged estoppel, considering that it was an abuse of process since a tribunal of competent jurisdiction had already tried the claim. NYC required the arbitration agreement to be valid under its proper law. V.1.a Formally the award had problems under lex arbitri (Dutch Law) it was required that the arbitration agreement must have been written and signed by the parties, containing the subject matter of dispute, names and domiciles, of parties and arbitrators

The tribunal distinguished consensual arbitration where jurisdiction is giving by consensus between the parties, not present under in the case; and statutory arbitration where jurisdiction is given by Statute, and the element of consensus must be found in the choice of the claimant in making a claim before such arbitral tribunal. So, what is the relevant statute of the I US CTR? 1. Competence of Arbitral Tribunal is found in International Law, not Dutch law, if under IL the tribunal is competent, such competence must be recognised by English courts. Two systems of municipal law, Iran –US, have given validity to the I US CTR 2. Under international law competence is usually given by Treaty but acquiescence may suffice to demonstrate the competence. In this case the Netherlands acquiesced in the operation of the Tribunal within its territory. 3. US and Iran have authorised their nationals to recur to the tribunal and regard its decisions as competent 4. A person can make such a tribunal competent by voluntary resorting to it. [International arbitration between a private and a State pursuant to a treaty is capable of giving rise to an issue estoppel (In a subsequent action between the parties on a different claim, the judgement is conclusive as to the issues raised in the subsequent action, it these issues {issue: single, certain point of fact or law disputed between the parties to the litigation} were actually litigated and determined in the prior action)]