Introduction
In a decision dated 14 August 2026, the Dubai International Financial Centre (DIFC) Courts, Court of First Instance in ARB 015/2026 and ARB 027/2026 (Princeton v Persephone) rendered an order on an application to set aside a DIFC-seated DIAC arbitral award and a related application for recognition and enforcement of that award.
The Court (H.E. Justice Mark Pelling) set aside the majority arbitral award and, as a consequence, set aside the earlier recognition order and dismissed the recognition claim. The Court’s reasons focus on the complaint that the tribunal reached its conclusions by reference to issues not pleaded or argued, denying a party a reasonable opportunity to present its case under the DIFC Arbitration Law.
Background facts
The dispute arose from a sale contract for 65,000 metric tonnes (+/-10%) of ultra-low sulphur diesel of Russian origin (the “Cargo”), already loaded on a vessel identified as “Penny” when negotiations began.
Key events described in the Court’s reasons include:
- 29 January 2024: Princeton sent Persephone a final draft “fixture recap” providing for payment of 100% of the “provisional value” within one business day of recap confirmation.
- 30 January 2024: Princeton issued three invoices totalling USD 51,563,543.61 for the provisional value.
- 31 January 2024: Persephone confirmed the recap. Princeton’s case was that payment fell due by 1 February 2024.
- Corrective invoicing followed.
- 7 February 2024: Princeton sent a formal contract (reflecting recap terms and a revised price). It included a payment term that payment was due no later than one day after presentation of specified shipping and cargo documents (bill of lading, invoice, and certificates of quantity and quality). The Court’s reasons record that both parties signed this agreement. The documents had been supplied on 16 January 2024.
- 7 February 2024: Persephone paid USD 40,909,665.02.
- 9 February 2024: Persephone paid a further USD 4,083,400. A balance remained unpaid.
- 14 February 2024: Princeton gave notice alleging material breach for non-payment and said it was attempting to mitigate losses by selling the Cargo to third parties.
- 21 February 2024: Persephone wrote that it had paid 95% of the price and:“[b]alance payment will execute after authorisation of final receivers of payments”
(i.e., payment would follow once Persephone received payment from onward buyers, on Princeton’s case). - 22 February 2024: Princeton maintained it accepted this as repudiation (as described in the reasons).
- April–May 2024: Princeton repaid sums totalling about USD 26.5 million, said to reflect the difference between the contract price and mitigation sale proceeds, less certain costs.
Persephone commenced DIAC arbitration on 10 July 2024, seeking (among other relief) payment of USD 18,493,065 plus interest and costs. The tribunal issued a final majority award dated 19 January 2026, finding Princeton liable to pay Persephone USD 18,493,065 plus interest and costs.
Princeton then brought ARB 015/2026 under Article 41 of the DIFC Arbitration Law (DIFC Law No. 1 of 2008) to set aside the award. Persephone brought ARB 027/2026 under Article 42(1) and RDC 43.62 (DIFC Courts Rules provisions governing recognition/enforcement of awards) for recognition and enforcement. A recognition order was initially granted on the papers on 6 May 2026, but enforcement was later prohibited pending the set-aside determination.
Legal considerations and the Court’s reasoning
DIFC set-aside and recognition framework (briefly)
The DIFC is a common-law jurisdiction within Dubai with its own courts and arbitration statute. Under the DIFC Arbitration Law, the Court may set aside a DIFC-seated award on specified grounds (Article 41), and may recognise and enforce awards (Article 42). Where there are parallel set-aside and enforcement steps, the Court may also address the sequencing and effect of a recognition order (including whether it should be stayed or set aside) depending on the outcome of the set-aside claim.
The challenge: decision on unpleaded/unargued issues and denial of a right to be heard
Princeton’s central complaint (as summarised by the Court) was that the tribunal majority reached its conclusion by reference to issues that were not pleaded and not argued, and that Princeton was denied an opportunity to be heard on those matters—engaging Articles 41(2)(a)(ii) and (iii) of the DIFC Arbitration Law.
Persephone resisted, characterising the challenge as an impermissible attempt to re-argue the merits. Persephone also argued that if there were any issue, relief should be limited to any “severable decision affected” or the Court should consider remission to the tribunal under Article 41(4).
Pleadings and the scope of the dispute as framed for the tribunal
A significant part of the Court’s reasons addresses what the parties actually put before the tribunal, and what the tribunal’s own procedural directions suggested about how the scope of the dispute would be identified.
The tribunal’s Procedural Order No. 1 directed, among other things, that:
- “The Parties’ pleadings shall contain a full statement of their respective factual and legal case, and the relief requested from the Tribunal. The Parties shall particularize their prayers for relief in a separate section of their submissions.”
- The parties were required to cross-reference evidence and arguments carefully, and the tribunal reserved a discretion to request additional evidence/submissions on any issue “in no case later than the evidentiary hearing.”
The Court read these directions as indicating that the tribunal intended the pleadings to be the primary source for the scope of the dispute and that the tribunal had created a legitimate expectation that, if it considered a point not covered adequately by the submissions, it would invite additional submissions.
On the pleadings themselves, the Court found (in summary):
- Persephone’s Statement of Claim pleaded the contract price and the amounts paid, and advanced a case that the non-payment was partial and amounted at most to breach of warranty, with the seller’s remedy being interest for late payment rather than termination.
- Princeton’s Defence and Counterclaim pleaded (among other points) reliance on Persephone’s 21 February email as evincing an intention not to perform payment obligations as required—described as renunciation/repudiation.
- Importantly, the Court accepted Princeton’s submission that Persephone did not plead that there was no obligation to pay the full price by the contractual due date (whether 1 or 7 February), nor that the obligation was waived, nor that Persephone was ready and able to pay other than in the manner indicated in the 21 February email.
The Court also noted that the arbitration proceeded without a hearing (the tribunal confirmed on 8 August 2025 that it did not require one, since neither party wanted one), and that certain reply/rejoinder steps in the timetable were not used.
Tribunal request for further submissions (limited scope)
The reasons record that, prior to the award, the tribunal chair requested further submissions by email dated 8 July 2025 on limited questions concerning the contract’s “Entire Agreement” clause and how it interacted with provisional invoices and payments made under the recap prior to signing the formal contract, including English law principles and case law on interpretation of entire agreement clauses.
The Court’s reasons (as provided in the excerpt) do not set out a broader invitation to address any additional dispositive issues beyond those topics.
Outcome: award and recognition order set aside
The Court ordered:
- “The Final Award shall be set aside.”
- “The Recognition Order shall be set aside and the Recognition Claim is dismissed.”
- Directions were made for written submissions on costs, with determination usually on the papers unless the Court or a party requests a hearing.
While the published extract provided in the prompt is incomplete (it cuts off during the discussion of the tribunal’s 8 July 2025 email), the order and the reasons summarised at the outset of the decision state the basis of the set-aside: the tribunal majority decided the dispute by reference to issues not pleaded and not argued, resulting in a denial of the right to be heard.
