(examined below) requires that an authenticated original award or a certified copy is produced. It is debatable whether an award made in paperless form is an authenticated original award.
Foreign arbitral awards
As with foreign judgments, there are several regimes that govern the recognition and enforcement in England of foreign arbitral awards.103 We shall, however, focus on the regime provided for by the New York Convention of 10 June 1958 on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter the ‘Convention’), which was negotiated within the framework of the United Nations (UN) and has been ratified or acceded to by a large number of countries with a wide variety of political and legal traditions, including all 27 EC member states. The Convention is now transposed by Pt III (ss 100–04) of the Arbitration Act 1996.
The scope of the New York Convention is defined by Art I. The primary rule is that it applies to the recognition and enforcement of arbitral awards made in a state other than the state where recognition or enforcement of the award is sought, and also to awards that are not considered as domestic awards in the state where recognition or enforcement is sought. However, a contracting state is permitted to make a reservation restricting its application of the Convention to awards made in other contracting states, and such reservations have been made by many states, including the United Kingdom (UK). Another reservation permissible to a contracting state confines its application of the Convention to disputes arising from legal relationships, whether contractual or not, which are regarded as commercial under its law, and such reservations have been made by many states (including France, Denmark and Greece), but not by the UK.104 Article I also makes it clear that it is immaterial whether the parties are individuals or corporate bodies, and whether the arbitrator was appointed for the particular dispute or was a permanent arbitral body to which the parties submitted.
Under the 1996 Act, the Convention applies in England to awards made in an arbitration, the seat of which is in another contracting state.105 The seat of an arbitration is defined by s 3 as its juridical seat, designated by the parties to the arbitration agreement, or by any arbitral or other institution or person vested by the parties with powers in that regard, or by the arbitral tribunal if so authorised by the parties, or determined, in the absence of any such designation, in the light of the parties’ agreement and all the relevant circumstances. The English internal law on arbitration, laid down in Pt I of the Act, is in general restricted by s 2 to cases where the seat of the arbitration is in England or Northern Ireland; and s 53 specifies that, unless otherwise agreed by the parties, where the seat of the arbitration is in England or Northern Ireland, any award in the proceedings shall be treated as made there, regardless of where it was signed, despatched or delivered to any of the parties. Similarly, s 100(2) specifies that for the purpose of the provisions implementing the NewYork Convention, an award is treated as made at the seat of the arbitration, regardless of where it was signed, despatched or delivered to any of the parties.
103On the common law regime, see Collins et al (eds), Dicey, Morris and Collins on the Conflict of Laws, 14th edn, 2006 and 2nd Supp, 2008, Sweet & Maxwell, r 59–60. Where there is a foreign judgment authorising enforcement of an award, it is possible to seek enforcement in England under the Administration of Justice Act 1920, the Foreign Judgments (Reciprocal Enforcement) Act 1933, or Pt II of the Civil Jurisdiction and Judgments Act 1982; see Dicey, Morris and Collins r 64. But Art 1(2)(d) of EC Regulation 44/2001 prevents the recognition or enforcement thereunder of a European judgment authorising enforcement of an award.
104For the difficulties that may arise if such a reservation is made by a state, such as India, whose law contains no clear distinction between commercial and non-commercial matters, see Indian Organic Chemicals v Chemtex Fibres (1978) 65 All India Reporter, Bombay Section, 108.
105Cf Hiscox v Outhwaite [1992] 1 AC 562, decided under the Arbitration Act 1975.
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Article III of the New York Convention requires each contracting state to recognise arbitral awards within its scope as binding and to enforce them, under the conditions laid down in Arts IV–VI. In general, the state addressed applies its own rules of procedure, and, in England, s 101 enables a recognised award to be relied on by way of defence, set off or otherwise, and provides for enforcement by leave of the court in the same manner as an English judgment. By Art IV and s 102, a party seeking recognition or enforcement must produce the duly authenticated original award or a duly certified copy of it; the original arbitration agreement or a duly certified copy of it; and, where appropriate, certified translations.
The substantive exceptions to recognition and enforcement are exhaustively defined by Arts V and VI, which are echoed by s 103. In broad terms, they relate to the invalidity or inadequate scope of the arbitration agreement, procedural deficiencies in the arbitration proceedings, the invalidity of the award in the country of origin, the non-arbitrability of the subject matter, and the public policy of the state addressed.
The wording of Art V makes it clear that, except for non-arbitrability and public policy, which may be raised by the court addressed of its own motion, the burden of establishing the existence of a ground for refusal of recognition and enforcement rests on the party opposing recognition (‘the respondent’). The only burden that rests on the applicant for recognition or enforcement is to produce the documents specified in Art IV, and to satisfy the court, by reference to these documents or otherwise, that the award falls within the scope of the convention as defined by Art I. If the applicant fulfils these requirements, the court is bound to recognise and enforce the award, unless the respondent establishes the existence of a ground for refusal under Art V, or the court of its own motion invokes Art V(2) on non-arbitrability of subject matter and public policy. Article V also makes it clear that where a ground for refusal is established, the court is not bound to refuse recognition and enforcement but has a discretion. Thus, it may accord recognition and enforcement, despite the establishment of a ground for refusal, where the right to rely on the ground has been lost by another agreement or estoppel. However, in most circumstances, the English courts will refuse recognition and enforcement if one of the specified grounds is established.106
Article II of the Convention envisages an arbitration agreement in writing and specifies that it may be contained in a substantive contract or may be a separate agreement and that it may be signed by the parties or contained in an exchange of letters or telegrams. In England, ss 5 and 100 provide a very wide definition of an agreement in writing. It is enough that the agreement is made in writing, even if it is not signed by the parties, or that it is made by exchange of communications in writing, or that it is evidenced in writing. It is also sufficient for the parties to agree otherwise than in writing by reference to terms which are in writing, or for an agreement made otherwise than in writing to be recorded by one of the parties, or by a third party, with the authority of the parties to the agreement. Moreover, an exchange of written submissions in arbitral or legal proceedings in which the existence of an agreement otherwise than in writing is alleged by one party against another party and not denied by the other party in his response, constitutes as between those parties an agreement in writing to the effect alleged. Finally, ‘writing’ includes recording by any means; thus, for example, email messages are included.
Article IV and s 102 require an applicant for recognition or enforcement of an award to produce a copy of the arbitration agreement. Hence, in the absence of a written agreement complying with Art II and ss 5 and 100, the application will fail in limine.
By Art V(1)(a) and s 103(2)(a), the court addressed may refuse recognition of an award if the respondent establishes that a party to the arbitration agreement was under some incapacity under
106 Kanoria v Guinness [2006] I Lloyd’s Rep 701.
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the law applicable to him (according to the conflict rules of the state addressed).107 By Art V(1)(a) and s 103(2)(b), it may also do so if the respondent establishes that the arbitration agreement was not valid under the law to which the parties subjected it or, failing any indication thereon, under the law of the seat of the arbitration. The law so ascertained will govern the essential validity of the arbitration agreement in relation to issues, such as misrepresentation, mistake or improper pressure. However, in view of Arts II and V(2)(a), it seems clear that Art V(1)(a) does not extend to questions concerning arbitrability of subject matter, and that for the purposes of Art V(1)(a) any national rule which discriminates against arbitration agreements concluded before the dispute arose must be ignored.
By Art V(1)(c) and s 103(2)(d) and (4), the court addressed may refuse recognition of an award if the respondent establishes that the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or that it contains decisions on matters beyond the scope of the submission to arbitration. However, severable decisions on matters submitted to arbitration may be recognised and enforced. In interpreting the arbitration agreement to determine its scope, the court addressed will no doubt apply the law which governs its essential validity under Art V(1)(a).
Article V(1)(b) and s 103(2)(c) enable the court addressed to refuse recognition of an award where the respondent establishes that he was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings, or was otherwise unable to present his case. The court addressed will no doubt have regard to what is acceptable under its own law of civil procedure and the treaties (especially those on recognition of foreign judgments) to which its state is a party. Thus, service in a manner which complies with the law of the seat of the arbitration will not automatically satisfy these requirements. For there to be inability to present one’s case, the party must have been prevented from doing so by events beyond his control, and not merely have failed, for reasons within his control, to take advantage of an opportunity to present his case; however, a party is unable to present his case if he is never informed of the case that he is called upon to meet.108
By Art V(1)(d) and s 103(2)(e), the court addressed may refuse recognition of an award where the respondent establishes that the composition of the arbitral authority, or the arbitral procedure, was not in accordance with the agreement of the parties or, failing such agreement, with the law of the seat of the arbitration. The court addressed must consider first the terms of the arbitration agreement, and only where they are silent should it refer to the law of the seat. It should not consider the validity of the agreed terms under any law, but should treat them as valid, leaving any attack on their validity to the courts of the country of origin. The need for Art V(1)(d) seems questionable, since a party dissatisfied with the arbitral proceedings can always attack the award in its country of origin in accordance with the law of that country, and Arts V(1)(e) and VI offer him derivative protection, ancillary to an attack in the country of origin, in other contracting states.
By Art V(1)(e) and s 103(2)(f), the court addressed may refuse recognition where the respondent establishes that the award has not yet become binding on the parties, or that it has been set aside or suspended by a competent authority of the country of the seat. This is supplemented by Art VI and s 103(5), which apply where an application for setting aside or suspension has been made to such an authority. In such a case, the court addressed may, if it considers proper, adjourn its decision on the recognition or enforcement of the award, and may also, on application by the party
107For the English choice of law rules on capacity to contract, see Chapter 17.
108Minmetals v Ferco Steel [1999] 1 All ER (Comm) 315; and Kanoria v Guinness [2006] 1 Lloyd’s Rep 701 (CA).
claiming recognition or enforcement, order the respondent to give security. Where the court grants such an adjournment, it may also allow partial enforcement in respect of a sum indisputably due.109 The meaning of ‘binding’, for the purposes of Art V(1)(e), is obscure. The expression replaces a requirement of the Geneva Convention 1927 that the award should be ‘final’, and appears to be
intended to overrule decisions given in some countries, not including the UK,110 by which ‘finality’ could only be proved by producing a decision of a court of the relevant country authorising enforcement of the award. An award should likely be considered ‘binding’, unless it is proved that in the country of the seat it would be treated as non-existent, in the sense that it would be ignored in all judicial proceedings, without the need for a judgment setting it aside.
Article V(2) and s 103(3) enable the court addressed to refuse recognition where it finds, whether at the invitation of a party or of its own motion, either that the subject matter of the difference is not capable of settlement by arbitration under its own law, or that the recognition or enforcement of the award would be contrary to its own public policy. Article II makes it clear that a country can consider a matter as non-arbitrable, for the purposes of the Convention, only if it will not accept the validity of an agreement for arbitration in respect of the matter, even if the agreement is made after the dispute has arisen.
The public policy proviso in the New York Convention will no doubt have a limited operation, similar to that of the corresponding proviso in relation to the recognition of foreign judgments (see pp 619–21). Thus, even before the Arbitration Act 1996, the Court of Appeal held, in
Deutsche Schachtbau-und Tiefbohrgesellschaft mbH v Ras Al Khaimah National Oil Co,111 that it was not contrary to English public policy to enforce a Swiss award given under an ICC arbitration clause, using as the proper law ‘internationally accepted principles of law governing contractual relations’, even though at that time an English arbitrator had to apply the law of the country that would have been applied by the English court. Where a foreign award is challenged on the ground of illegality in the underlying transaction, the English court is likely to uphold the award, unless the illegality is apparent from the face of the award.112 Moreover, a challenge on the ground of fraud in obtaining the award must be based on cogent evidence which was not available at the time of the arbitral hearing.113 However, as the European Court ruled in Eco Swiss China Time v Benetton,114 it would be contrary to public policy, within the New York Convention, to enforce an award which had upheld a contract which infringed the competition rules laid down by Art 81 of the EC Treaty.
Conclusion
Without doubt, arbitration has a great many advantages to recommend it as a workable alternative to litigation. Nonetheless, it can prove to be a costly and time consuming exercise.This has seen the emergence of other dispute resolution mechanisms, notably mediation, considered in Chapter 20.
109See IPCO (Nigeria) Ltd v Nigerian National Petroleum Corporation (No 2) [2008] 2 Lloyd’s Rep 59.
110See Union Nationale des Coopératives Agricoles v Catterall [1959] 2 QB 44.
111[1990] AC 295; reversed by HL on other grounds.
112See Soleimany v Soleimany [1999] QB 785 (CA); Westacre Investments v Jugoimport-SDPR [1999] 2 Lloyd’s Rep 65 (CA); Omnium v Hilmarton
[1999] 2 Lloyd’s Rep 222; and R v V (2008) 119 ConLR 73.
113See Westacre Investments v Jugoimport-SDPR [1999] 2 Lloyd’s Rep 65 (CA). See also Gater Assets v Naftogaz (No 2) [2008] 1 Lloyd’s Rep 479.
114Case C-126/97: [1999] ECR I-3055. Cf Case C-38/98: Renault v Maxicar [2000] ECR I-2973.
