Arbitration Tips
Challenging recognition and enforcement of an arbitral award
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Arbitration Tips Challenging recognition and enforcement of an arbitral award One of the primary advantages of arbitration is the relative ease of enforcement of arbitral awards in states which are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958. The New York Convention provides an exhaustive list of grounds on which recognition or enforcement of an arbitral award may be refused. Those grounds are explained below.
John Abbott
Russell Beard
Partner john.abbott@laytons.com +44 (0)20 7842 8000
Partner russell.beard@laytons.com +44 (0)20 7842 8000
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Arbitration Tips | Challenging recognition and enforcement of an arbitral award
1. Incapacity of the parties1
4. Party unable to present its case4
Capacity represents the legal ability of a party to act and
This ground tends to be interpreted as applicable only where
to enter into an agreement in its own name and on its
a party is unable to present its case for reasons beyond its
own behalf. In practice, capacity may concern a party’s
control due to a failure of due process. The English court
competence or age or whether the law applicable to that
considers it to be concerned with the “fundamental structural
party places any restriction on it from entering into an
integrity” of the arbitration proceedings. It is not intended to
arbitration agreement.
permit a back-door route into challenging the merits of the case. Similarly, a failure by a party to produce submissions or
Questions of capacity are assessed by reference law applicable
evidence which might have helped its case is unlikely to assist.
to the party claiming incapacity/invalidity.
2. Invalidity of the arbitration agreement2
5. Award deals with matters outside the jurisdiction of the tribunal If an award goes beyond the scope of the arbitration
Invalidity may, for example, concern questions over whether a
agreement then recognition and enforcement may be
party is, in fact, bound by the arbitration agreement.
refused.
Questions of invalidity are assessed by reference to the law
The court may, where possible, sever from the award those
to which the parties subjected the arbitration agreement or,
parts of it which are outside the jurisdiction of the tribunal and
if the parties did not agree the applicable law, the law of the
permit partial enforcement of those parts which are within the
country in which the award was made.
tribunal’s jurisdiction.
3. No proper notice3
of the arbitration proceedings.
6. Composition of tribunal or procedure not in accordance with agreement or law of the country where the arbitration took place
National courts will need to consider questions such as what
The composition of the tribunal and the procedure must be
constitutes proper notice; the form notice should take; how
in accordance with the arbitration agreement. The court
notice should be given; and the timing of service. Courts
may have regard to whether or not a lack of compliance
tend not to take an overly formulaic approach and to look at
is significant and whether or not there exists any causal
all the surrounding circumstances.
connection between a lack of compliance and the award. In
1.
4.
A party may oppose recognition and enforcement if it has not received proper notice of the appointment of the arbitrator or
New York Convention Article V(1)(a) New York Convention Article V(1)(a) 3. New York Convention Article V(1)(b) 2.
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New York Convention Article V(1)(b)
Arbitration Tips | Challenging recognition and enforcement of an arbitral award
practice, successful challenges on grounds of procedure are
award obtained by fraud or perjury; breach of fundamental
rare, given that the tribunal generally has a large degree of
principles of mandatory law.
autonomy in how it controls the proceedings.
7. Award not binding on parties or set-aside or suspended
The burden of proof The burden of establishing the grounds rests on the party seeking to challenge recognition and enforcement of the award.
Recognition and enforcement may be refused where: The court may determine the latter two (8 and 9) of its own • the award is not binding (awards are usually binding
motion, although in practice there is likely to be some onus
when made, but the relevant rules or law governing the
on the party seeking an order refusing recognition and
arbitration may impose formalities or conditions);
enforcement to establish those grounds are made out.
• the award has been set-aside or suspended by the
Waiver
supervisory court of the seat of the arbitration (the court asked to recognise and enforce the award may
Parties affected by the matters which might lend support
not always honour that decision, e.g. if it considers it to
to the grounds above need to take care not to take steps
offend principles of natural justice or public policy).
which might risk a waiving their right to object. For example, a serious procedural failing should generally be challenged
8. Subject matter not capable of settlement by arbitration
before the tribunal, rather than waiting until the enforcement stage before raising it.
The merits
The court asked to recognise and enforce an award may refuse if it determines, in accordance with its state’s laws,
The court asked to consider any of these grounds is not
that the subject matter of the dispute is not capable of being
permitted to reconsider the merits of the dispute determined
resolved by arbitration.
by the arbitral tribunal. A party who wishes to challenge the tribunal’s findings on the substance of the dispute will have
9. Recognition and enforcement contrary to public policy
to look to other options (see our separate article: Arbitration Tips: Challenging an arbitral award in the English court).
Other conventions
If an award is contrary to public policy in the state in which recognition and enforcement is sought, the court may refuse.
Other conventions may have an impact on recognition and
Whilst there is no uniformity between matters of public policy,
enforcement. Their existence and status in relation to the
the English court takes a restrictive approach prioritising the
New York Convention as a matter of national law will require
policy of upholding international arbitral awards. Examples
careful consideration in each case.
of situations where an award may be contrary to public policy include: illegality; breach of principles of natural justice;
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Arbitration Tips | Challenging recognition and enforcement of an arbitral award
Arbitration Our team is experienced in resolving disputes through arbitration and committed to providing outcomes-focused, innovative and commercially minded advice to guide our clients through all stages of the arbitration process. We represent clients from across the globe in arbitrations involving a range of sectors including construction, international trade and commodities, investment treaties and shipping. Our experience spans arbitrations convened through the main international institutions such as the ICC, LCIA, LMAA, DIFC and SIAC as well as on an ad-hoc basis.
Our Team John Abbott
Russell Beard
Partner john.abbott@laytons.com +44 (0)20 7842 8000
Partner russell.beard@laytons.com +44 (0)20 7842 8000
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Simon Foster
Partner robert.clark@laytons.com +44 (0)20 7842 8000
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Will Slater
Partner rebekah.parker@laytons.com +44 (0)20 7842 8000
Consultant will.slater@laytons.com +44 (0)20 7842 8000
Geraint Thomas
Ben Thorogood
Partner geraint.thomas@laytons.com +44 (0)20 7842 8000
Solicitor ben.thorogood@laytons.com +44 (0)20 7842 8000
Daniel Walter Solicitor daniel.walter@laytons.com +44 (0)20 7842 8000
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This information is offered on the basis that it is a general guide only and not a substitute for legal advice. We cannot accept any responsibility for any liabilities of any kind incurred in reliance on this information.
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