Interpretation and Application of the New York Convention by National Courts

Bermann, George A.

doi:10.1007/978-94-024-1066-2_3

George A. Bermann^5,6

Part of the book series: Ius Comparatum - Global Studies in Comparative Law ((GRIA,volume 24))

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Abstract

This General Report provides an analytical overview of critical issues concerning the interpretation and application—in forty-four jurisdictions—of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly known as the New York Convention. The Chapter surveys and synthesizes national responses to a sample of questions on major Convention topics: implementation of the Convention, enforcement of agreements to arbitrate, grounds for refusal of recognition and enforcement under the Convention, and procedural issues in recognizing and enforcing foreign awards. This report concludes with an assessment of experience in the implementation of the Convention across jurisdictions.

This General Report is subject to further editing and will be published, together with the National Reports from each jurisdiction, by Springer in a thematic volume.

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Notes

1.
Argentina, Australia, Austria, Brazil, Canada, China, Colombia, Croatia, the Czech Republic, France, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Ireland, Israel, Italy, Japan, Korea, Macau, Malaysia, Mexico, the Netherlands, Norway, Paraguay, Peru, Portugal, Romania, Russia, Singapore, Slovenia, Spain, Sweden, Switzerland, Taiwan, Turkey, United Kingdom, United States, Uruguay, Venezuela, and Vietnam.
2.
A good example is France. The Convention itself was published in the Official Journal: J.O. du 6 septembre 1959, p. 8726. See also the national reports for China, Japan, Portugal, and Sweden. In China, the National Supreme Court expressly declared the New York Convention to be applicable without need of any legislative implementation. (Portugal and Switzerland are among those jurisdictions that have enacted legislation implementing the Convention, even though, as a matter of constitutional law, they consider the Convention to be self-executing.)
3.
See, for example, Austria (Federal Law Gazette 1961/200); Korea (Korean Arbitration Act, chapter VII); and Sweden (Swedish Arbitration Act, s 54–60). The fact that a State enacts implementing legislation does not necessarily mean that the Convention is not itself self-executing. This appears to be the case, for example, in Malaysia.
4.
Implementing legislation in Hong Kong (Hong Kong Arbitration Ordinance, s 87) says little more than “A Convention award is enforceable in Hong Kong.”
Similarly, Art 74 of the Peruvian Arbitration Law 2008 simply states that the Convention shall apply to the recognition and enforcement of foreign arbitral awards. In the United States, Congress implemented the Convention through incorporation by reference in Chapter Two of the Federal Arbitration Act (9 U.S.C. § 201ff). The majority of Canadian provinces have adopted a short implementing statute to which the text of the Convention is simply attached. See the Canadian report, footnote 3 and accompanying text. In Quebec, the Code of Civil Procedure instructs courts to take the Convention into account in interpreting the provisions of the province’s Code of Civil Procedure on the subject. Code of Civil Procedure, art 948(2). The obligation to do so was confirmed by the Canadian Supreme Court in GreCon Dimter Inc. v J.R. Normand, Inc., [2005] 2 SCR 401. See also the national reports for Germany (Civil Procedure Code, s 1061); Greece (Code of Civil Procedure, arts 903, 906); Israel (Arbitration Law, 28 LSI (5734-1973/74), s 29A, implemented by Regulation for the Execution of the New York Convention, 5738-1978 (1978)); Italy (Law of Jan. 19, 1968, n. 62, further implemented by Civil Procedure Code, arts 839-40); the Netherlands (Arbitration Act 1986, codified in Code of Civil Procedure, art 1075); and Slovenia (Arbitration Act, offc’l gazette no. 45/2008, art 42/2).
5.
See, for example, the 1996 Arbitration Act of the United Kingdom, s 100-04.
6.
See, for example, the national reports for Ireland (Arbitration Act 2010); Malaysia (Arbitration Act 2005, s 38-39); Norway (Arbitration Act, no. 25 (2004)); and Singapore (International Arbitration Act, act no. 23 (1994). Interestingly, Ontario repealed its statute implementing the Convention when it adopted the UNCITRAL Model Law on International Commercial Arbitration through the International Commercial Arbitration Act (RSO 1990, c I-9), in the view that the implementing statute had thereby become superfluous. This led to at least one decision refusing to apply the Convention on the ground that it had not been shown to be in force the province. Kanto Yakin Kogyo Kabushiki-Kaisha v Can-Eng Mfg. Ltd, (1992) 4 BLR (2d) 108. Reportedly, a consensus has since emerged that enactment of the International Commercial Arbitration Act constitutes implementation of the Convention.
7.
International Arbitration Act (“IAA”) 1974 (1989).
8.
Resort Condominiums v Bolwell, (1993) 118 ALR 655.
9.
The Supreme Court of Indonesia ruled that the courts could not apply the New York Convention to enforce a foreign arbitral award because Indonesia had never statutorily implemented the Convention: PT Nizwar v Navigation Maritime Bulgars Varna, case no. 2944 K/Pdt/1983 (1984). Subsequently, the Supreme Court issued Regulation 1 of 1990, requiring recognition and enforcement of foreign awards pursuant to bilateral or multilateral conventions. The legislature thereafter enacted Law no. 30 of 1999 concerning Arbitration and Alternative Dispute Resolution: Undang-Undang Nomor 30 Tahun 1999 tentang Arbitrase dan Alternatif Penyelesaian Sengketa (1999).
Macau is a special case. In 1999, just prior to ending its administration over Macau, Portugal extended application of the Convention to that territory by Presidential Decree 188/99, effective February 10, 2000. In 2005, the government of China formally declared the Convention applicable in Macau, which declaration was then published in the Macau Official Bulletin (no. 13).
10.
The most straightforward scenario is one in which the Convention is literally attached to the implementing legislation. Most of the Canadian provinces have followed that practice.
Australia presents a slightly different situation. Australia enacted the New York Convention by way of the Arbitration (Foreign Awards and Agreements) Act of 1974, renamed the International Arbitration Act 1974 in 1989 when the UNCITRAL Model Law was given force of law through Part III of the Act. The provisions of the Convention are paraphrased in Part II of the International Arbitration Act.
11.
See, for example, Argentina, China, Croatia, Georgia, Hong Kong, Hungary, India, Indonesia, Korea, Macau, Malaysia, Romania, Turkey, the United States, Venezuela, and Vietnam.
12.
See, for example, the Czech Republic, France, Japan, the Netherlands, Portugal, Singapore, and the United Kingdom. The Canadian provinces (other than Quebec) have made the commercial declaration only.
13.
The States that apparently have not made any reservations to the application of the New York Convention include Austria, Brazil, Germany, Ireland, Israel, Italy, Norway, Paraguay, Peru, Slovenia, Sweden, Switzerland and Uruguay. Norway presents the unusual situation in which the State made the reciprocity declaration, but is deemed to have abandoned that through its implementing legislation (Arbitration Act, act. no. 25 (2004), s 45).
14.
In addition to interposing the reciprocity and commercial declarations, Vietnam made the following reservation: “All interpretations of the Convention before the courts or other competent authorities of Vietnam shall observe the rules laid down in the Constitution and law of Vietnam” (Decision no. 453/QD-CTN (1995), art 1). According to the national reporter, Vietnam’s insistence on interpreting the Convention under its own law “surely impairs the objective of the New York Convention which is to unify internationally rules governing foreign arbitral awards.” However, in Decision no. 01/2013/QDST-KDTM (2013), a Vietnamese court reaffirmed this reservation.
15.
China, for example, has not legislated any definition of an “arbitral award.” Some national legislation simply reproduces the definition of “arbitral award” found in the New York Convention itself. This is the case, for example, in Australia (International Arbitration Act, s 3(1)) and Singapore (International Arbitration Act, s 27(1)).
Some jurisdictions provide statutory definitions that are not particularly illuminating. The Arbitration Law of Israel, section 1, defines an arbitral award as “an award made by an arbitrator, including an interim award.” Other jurisdictions do not purport to provide any statutory definition of the term. These include Austria, Brazil, Canada, France, India, Korea, Macau, the Netherlands, Norway, Paraguay, Peru, the United Kingdom, the United States, Uruguay, Venezuela and Vietnam.
In such jurisdictions, it is typically left to courts and scholars to define the term. The French Supreme Court has defined arbitral awards as “decisions by arbitrators that resolve definitively, in whole or in part, the dispute that has been submitted to them, whether on the merits, on jurisdiction or on a procedural motion that leads the arbitrators to bring the proceedings to a close.” Cass. Civ 1re, Oct. 12, 2011, Rev arb., 2012.86. Courts have given workable definitions of arbitral awards in other countries as well, including Canada and Greece. In still other countries, such as Austria, scholars play a very large role in defining what is meant by an arbitral award.
A number of jurisdictions specify that an arbitral award must be on “the merits.” See, for example, the national reports for Portugal and Venezuela. Other jurisdictions, such as Sweden and Taiwan, specify that to be an award a determination must be “final and binding.”
16.
The problem is not solved by enacting the UNCITRAL Model Law on International Commercial Arbitration. That instrument defines the terms “arbitration” and “arbitral tribunal,” but not “arbitral award.” Indeed, even the Model Law’s definitions of “arbitration” and “arbitral tribunal” are not particularly instructive.
Section 27 of the Swedish Arbitration Act authorizes three types of determinations to take the form of arbitral awards: (1) decisions on issues referred to the arbitrators, (2) decisions to terminate arbitral proceedings without deciding the issues, and (3) confirmation of settlement agreements. Any other determination by an arbitral tribunal takes the form of a “decision,” which is not an award.
17.
Art 31 reads:

(1) The award shall be made in writing and shall be signed by the arbitrator or arbitrators. In arbitral proceedings with more than one arbitrator, the signatures of the majority of all members of the arbitral tribunal shall suffice, provided that the reason for any omitted signature is stated.

(2) The award shall state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given or the award is an award on agreed terms under Art 30.

(3) The award shall state its date and the place of arbitration as determined in accordance with Art 20(1). The award shall be deemed to have been made at that place.

(4) After the award is made, a copy signed by the arbitrators in accordance with paragraph (1) of this Art shall be delivered to each party

One State, Greece, makes the definition of an award depend on the law governing the arbitral award, which most likely means the law of the arbitral situs.
18.
Partial awards are expressly recognized as constituting awards under the Convention in Croatia (Law on Arbitration, art 30); Ireland (Arbitration Act 2010, art 2(1)); Malaysia (Arbitration Act 2005, s 2); Peru (Arbitration Law, art 54); and Portugal (Law no. 63/2011, art 42(2)).
19.
See, for example, the national reports for Germany, Israel, Korea, Norway, Switzerland, and the United Kingdom. The issue evidently remains open in Slovenia.
20.
See Sect. 3.2.3.1 of this report.
21.
See the national report for Canada. The prevailing view at least in Switzerland is that expert determinations are not awards.
22.
It should be pointed out that the term “foreign arbitral award” has a highly distinctive meaning in the United Kingdom. According to the U.K. report, a “foreign arbitral award” is an award rendered in a State that is not a party to the New York Convention.
23.
See, for example, the national reports for Australia (International Arbitration Act, s 3(1)); Brazil (Arbitration Act, art 34); China (Arbitration Law, arts 66, 72); Croatia (Law on Arbitration, art 38); Germany (ZPO s 1025(I) and (IV); Israel (Arbitration Law, s 1); Slovenia (Arbitration Act, art 1/1); and Sweden (Swedish Arbitration Act, s 52) The same is true according to the national reports for France, Italy, Korea, Malaysia, Portugal, and Switzerland.
The German national report raises the possibility that a court might decline to treat an award rendered abroad as an award within the meaning of the Convention if, under the law of the rendering State, the award required local judicial confirmation (i.e. reduction to a local court judgment) in order to be enforceable and such confirmation had not in fact taken place (citing BayObLG, 4Z Sch 13/02, SchiedsVZ 2003, 142, para 47-48 (2002)).
24.
The matter is unsettled in certain jurisdictions, such as Venezuela.
25.
See, for example, the national report for Switzerland.
26.
According to the Turkish national report, despite the prevalence of the “principle of procedural law,” some courts continue to apply a strict territorial approach or a combination of both. Emphasis is placed in the report on decisions of the 15th Civil Chamber of the Supreme Court, which currently considers that an award rendered under “the authority of a foreign law” is a foreign award, even if rendered in Turkey.
27.
According to the U.S. Federal Arbitration Act, section 202:

An arbitration agreement or arbitral award arising out of a legal relationship, whether contractual or not, which is considered as commercial, including a transaction, contract, or agreement described in section 2 of this title, falls under the Convention. An agreement or award arising out of such a relationship which is entirely between citizens of the United States shall be deemed not to fall under the Convention unless that relationship involves property located abroad, envisages performance or enforcement abroad, or has some other reasonable relation with one or more foreign states. For the purpose of this section a corporation is a citizen of the United States if it is incorporated or has its principal place of business in the United States.
28.
These States apparently also include China (award made in Beijing is treated as foreign for Convention purposes apparently for the sole reason that it was rendered under aegis of the Court of Arbitration of the International Chamber of Commerce); Hungary (award rendered locally is foreign if institution under whose aegis the award was rendered is outside of Hungary and a majority of the tribunal are non-Hungarians); Indonesia (award rendered locally is foreign if made by arbitrators or in the name of institutions that are treated as “international” under Indonesian law); Romania (award rendered locally is foreign if “it arises from a private law relation containing a foreign element”); Uruguay (award rendered locally is foreign if issued within the framework of an international arbitral proceeding); and Vietnam (same).
29.
9 U.S.C. §202 (2012).
30.
See the national report for France, pointing out that this circumstance has not yet arisen in that country. The Greek report expressly entertains the possibility, but regards it as foreclosed by Law 2735/1999, art 1, which introduced the UNCITRAL Model Law in Greece and contains a strict territorial criterion. According to the German report, courts in the past were willing to consider an award rendered in Germany under a foreign law of arbitration to be a Convention award, but that position has been abandoned by the statutory reform of 1998.
In Taiwan, Art 47 of the Arbitration Act defines a “foreign arbitral award” as “an arbitral award which is issued outside the territory of the Republic of China on Taiwan or issued pursuant to foreign laws within the territory of the Republic of China on Taiwan.” The latter include awards made under the arbitration law of another country, under the aegis of a foreign arbitral institution or under the rules of an international organization (which would include the UNCITRAL Model Law). It should be added that since, under the Constitution of the Republic of China, mainland China is still part of the Republic, an arbitral award made on mainland China is not a “foreign award.” The same applies to awards made in Hong Kong or Macau.
The question of what awards rendered locally might be deemed “foreign” for Convention purposes is apparently still very much open in Japan.
31.
In a significant number of jurisdictions, the issue has apparently not arisen. See, for example, Hong Kong, Hungary, India, Paraguay, Uruguay and Vietnam. In other national reports (for example, for Ireland, Israel, Macau and Venezuela,) the issue is simply not addressed.
There is no settled law on the subject in Canada, apart from the two provinces—British Columbia and Ontario—that have statutorily determined that provisional measures may be treated as awards.
The situation is notably unclear in Indonesia. On the one hand, the New Arbitration Law, section 32(1), expressly provides that: “[a]t the request of one of the parties, the arbitral tribunal may render a provisional award or other interim awards …, including granting the attachment of assets, ordering the deposit of goods to a third party or the sale of perishable goods.” The statute thus employs the term “award” in this context. The national reporter nevertheless gives voice to some doubt as to enforceability of this species of award.
32.
The authors of the reports for China, Ireland, Korea, and Malaysia state their belief that provisional arbitral measures are enforceable as awards, but cannot point to any case law so holding. The Korean national reporter bases his supposition on an unusual “understanding,” namely that “the Convention does not require finality of … arbitral awards.” Although the Chinese national reporter does not point to any case law to this effect, he strongly advocates treating provisional measures as awards. He notes that the New York Convention uses the term “binding” in Art V, but not the term “final,” and so argues that, even if provisional measures are not “final,” they are surely “binding,” and that should suffice. He also considers the enforceability of provisional measures to be critical to arbitration’s efficacy.
33.
Though there is evidently no case law on the subject in their jurisdictions, several national reporters express confidence that provisional measures would not be considered to amount to arbitral awards. See, for example, the national reports for Brazil, Georgia, and Vietnam.
34.
These jurisdictions appear to include Argentina, Austria, Canada, Croatia, the Czech Republic, Germany, Greece, Italy, Japan, the Netherlands, Norway, Paraguay, Peru, Russia, Singapore, Switzerland, Taiwan, and Turkey.
This position is expressly stated in the Rules of Arbitration of the Permanent Arbitration Court of the Croatian Chamber of Economy, art 26(2). While the Norwegian legislation does not so state, the legislative history clarifies that measures of provisional relief do not constitute awards for recognition and enforcement purposes. Ot.pr. nr. 27 (2003–2004), s 13, s 23, comment on s 19. In the case of the Netherlands, however, under a proposed amendment to national legislation, a measure of provisional relief issued by a tribunal sitting locally would constitute an award. 2014 Proposal for the New Act (Draft Arbitration Act), art 1043b, para 4: “Unless the arbitral tribunal decides otherwise, a decision of the arbitral tribunal ordering an interim measure shall be an arbitral award.” (The proposal specifically provides, however, that such a measure is not subject to annulment as an award.) The national reporter reasonably infers from this that under the proposed revision a measure of provisional relief issued by a foreign tribunal would be enforceable in the Netherlands as an award.
The possibility of treating provisional measures rendered by tribunals abroad is also evidently under active consideration in Sweden.
35.
For a judgment to this effect, see the Australian case of Resort Condominiums v Bolwell, (1993) 118 ALR 655.
36.
These States include India, Macau, Peru, Romania, Singapore, the United Kingdom, and Venezuela. Legislation in the Canadian provinces of British Columbia (International Commercial Arbitration Act, RSBC 1996, c 233, s 2(1)) and Ontario (International Commercial Arbitration Act, RSO 1990, c I-9, s 9) expressly designate provisional measures as awards. The British Columbia and Malaysian statutes specifically provide that arbitral decisions granting interest or costs constitute arbitral awards.
The French national report cites a single decision of the Paris Court of Appeal treating a provisional measure as an award and emphasizing that the tribunal had issued the measure sous astreinte, i.e., providing for a fine in the event the order is not complied with: Otor, Rev arb., 2005.737 (2004). The national reporter cites the case for the proposition that whether a provisional measure constitutes an award depends fundamentally on the intention of the tribunal, but observes that the recent French decree on arbitration (Decree of Jan. 13, 2011) neither accepts nor rejects this position and that the Cour de Cassation has not yet had occasion to address the issue.
The case law in the United States, where the issue has repeatedly arisen, remains divided. The emerging trend is to place the emphasis, not on labels, but on the tribunal’s intention as to whether the provisional measure should be regarded as final. For an example of a provisional measure that qualified as an award, see Pacific Reinsur. Mgmt Corp. v Ohio Reinsur. Corp., 935 F.2d 1019 (9th Cir., 1991), emphasizing that the measure was necessary to ensure that the final award would be meaningful. For an example of a provisional measure that did not qualify as an award, see Chinmax Med. Sys., Inc. v Alere San Diego, Inc., 2011 WL 2135350 (S.D. Cal., May 27, 2011), relying heavily on the fact that the measure described itself as modifiable.
37.
International Arbitration (Amendment) Act 2012, s 10, adding Section 12(1) to the International Arbitration Act.
38.
See, for example, Section 19(3) of the Malaysian Arbitration Act, so providing. However, the national reporter notes the absence of case law on the matter. Similarly, Art 48(4) of the Arbitration Law of Peru authorizes recognition and enforcement of provisional measures issued by a tribunal outside Peru in accordance with the same provisions applicable to recognition and enforcement of foreign arbitral awards.
39.
See, for example, the national reports for Canada, France and Italy.
40.
This point is particularly underscored in the national report for Australia, which adopted the UNCITRAL Model Law, as amended in 2006, and its provisions on the enforceability of provisional measures issued by foreign arbitral tribunals. According to the national reporter, Croatia would be in this position had it adopted the UNCITRAL Model Law prior to its amendment in 2006, when the Model Law was amended to make provisional measures enforceable, albeit not as awards. He urges that national courts interpret the Model Law, as enacted in Croatia, in the spirit of the 2006 amendment. For a similar observation, see the national report for Greece.
41.
See, for example, the national report for Slovenia (citing Arbitration Act, art 43) and Paraguay (basing this finding on case law, namely the judgment in the case of Nucleo S.A. v Olympia, AI no. 1216 (Court of First Instance, Nov 12, 2012)).
42.
According to the Convention’s Art VII(1):

The provisions of the … Convention shall not affect the validity of multilateral or bilateral agreements concerning the recognition and enforcement of arbitral awards entered into by the Contracting States nor deprive any interested party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such award is sought to be relied upon.
43.
See, for example, the national reports for Austria (ZPO, s 614, referring to the Austrian Enforcement Act, s 79ff); the Czech Republic (including Act no. 91/2012 Coll. on International Private Law); Italy (Code of Civil Procedure); Korea (Korean Arbitration Act); Romania (Civil Procedure Code, arts 1.123 through 1.132); Singapore (the common law); Switzerland (Private International Law Act (“PILA”), art 178); and Turkey (Act on Private International Law and Procedural Law, No. 5718 of Nov 27, 2007 (“APIL”), and Act on International Arbitration (“AIA”), no. 4686 of June 21, 2001.
Legal doctrine in Turkey is divided as to whether the APIL is always available to the award creditor; at least some take the view that the APIL may only be used in the recognition and enforcement of awards rendered in States that are not a party to the New York Convention. As for the AIA, which is based on the UNCITRAL Model Law, it applies when (i) Turkey is the place of arbitration or the parties or tribunal chooses the AIA as applicable, and (ii) the dispute contains a “foreign element” as the AIA defines that term. It is not entirely clear from the report whether the APIL or AIA is more advantageous than the Convention from the award creditor’s point of view. The grounds for denying recognition and enforcement under the AIA are framed differently than under the Convention. A court refuses recognition or enforcement sua sponte if the award (i) stems from an arbitration agreement that does not exist, (ii) is contrary to public policy or good morals, or (iii) adjudicates a dispute that is non-arbitrable under Turkish law. Additional grounds come into play only if the award debtor invokes them and can shows (i) that it was not represented properly before the arbitral tribunal, (ii) that it was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present its case, (iii) 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 country where the award was made, (iv) that the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the law of the country where the arbitration took place, (v) that the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration or (vi) that the award has not yet become binding or enforceable on parties under the law to which the parties subjected it or under the law of which the award was made. It is difficult to say, on the face of things, whether this set of defenses is more arbitration-friendly than those set out in the Convention.
Among the jurisdictions reporting no alternative legislative avenue for recognition and enforcement of foreign arbitral awards (that is, apart from other treaty avenues) are Ireland, Macau, Sweden, Switzerland, the United States and Venezuela. In the case of Macau, by way of exception, alternate avenues exist for the enforcements of awards rendered in China and Hong Kong.
The Supreme Court of Norway has held that the Convention (as implemented in Norway through Sections 45-46 of the Arbitration Act) is the sole legislative basis on which a foreign arbitral award may be recognized or enforced. The same rule obtains in Portugal and Slovenia. Absent a treaty, the only available avenue for recognition or enforcement of a foreign arbitral award in these jurisdictions is the New York Convention, as implemented by domestic law.
Jurisdictions in which apparently no attempt has been made to invoke a domestic alternative to the New York Convention include Hungary and Indonesia, Section 33(1) of the Singapore International Arbitration Act (implementing the Convention) expressly authorizes parties “to enforce an arbitral award otherwise than as is provided for” in that Act, but in fact, apart from other treaty mechanisms, no alternative is used with any frequency.
The Japanese report does not spell out any salient differences between the New York Convention and the domestic law alternatives.
Finally, in some jurisdictions the available alternative is reportedly less favorable than the Convention to recognition and enforcement of foreign arbitral awards. See, for example, the Netherlands (Arbitration Act of 1986, art 1076) and Vietnam (Code of Civil Procedure). One of the alternatives mentioned in a few national reports is recognition and enforcement of judgments of the courts of the arbitral situs, confirming the foreign award and reducing it to judgment. See, for this, the national report for Israel (Sira Bracha Pickholz v Sohacheski, CA 10854/07). The Israeli national reporter does not favor the availability of this alternative due to the difference between grounds for denying recognition or enforcement to foreign awards and foreign judgments. See also the national reports for Malaysia (Reciprocal Enforcement of Judgments Act 1958), Singapore (Reciprocal Enforcement of Judgments Act 1985), and the United Kingdom (Foreign Judgments (Reciprocal Enforcement) Act 1933). Generally, the requirements for recognition or enforcement of foreign judgments are stricter than those prescribed by the New York Convention for foreign awards.
44.
See, for example, Austria.
45.
See, for example, Canada, where most of the provinces have adopted the Model Law. In Ontario, where the Convention has not been implemented through a separate statute, use of the Model Law as enacted is the sole available enforcement regime. See Activ Financial Systems, Inc. v Orbixa Mgmt Servs, Inc., 2011 ONSC 7286, 211 ACWS (3d) 258 (Superior Court of Justice).
46.
See Astro Nusantara International BV & Ors v PT Ayunda Prima Mitra & Ors, [2013] 1 SLR 636, para 101-02.
47.
Code of Civil Procedure. Among the advantages is the absence, as a basis for refusal to recognize or enforce a foreign award, of the fact of its annulment in the place of rendition.
48.
Norsolor, Cass. Civ 1re, Oct. 9, 1984, Rev arb. 1985; decision of March 10, 1993, Cass. Civ 1re, Rev arb. 1993.255 (2d case). In Germany as well, a court will apply the most liberal regime available for the enforcement of foreign arbitral awards—indeed whether the award creditor invokes it or not. BGH, III ZB 68/02, SchiedVZ 2003, 281, para 9 (Sept. 25, 2003); BGH, III ZB 18/05, SchiedsVZ 2005, 306, para 16 (Sept. 21, 2005); BGH, III ZB 50/05, BGHZ 166, 278, SchiedsVZ 2006, 161, para 19 (Feb. 23, 2006). The same may be said of Greece (Patras Court of Appeal 426/1982, Legal Tribune 1983.252). The Paraguayan Arbitration Law No. 1879/02 specifically provides that “except agreement otherwise, [the courts] shall apply the [international treaty that is] the most favorable to the party requesting the recognition and enforcement of an agreement and arbitral award.” To similar effect is Art 78 of the Arbitration Law of Peru.
49.
See, for example, Australia (common law action alternative) and Greece (Code of Civil Procedure, arts 903, 906).
50.
See, for example, Argentina, where courts have applied domestic law (Code of Civil and Commercial Procedure, arts 517, 519) rather than the New York (or Panama) Convention, without any indication that it was a more favorable avenue for enforcement. See also Brazil (applying internal Resolution no. 9/2005 of the Superior Tribunal of Justice (STJ), the Brazilian court having exclusive jurisdiction over actions for the recognition and enforcement of foreign arbitral awards). In Croatia, courts have applied the Law on Arbitration, in lieu of the Convention, even though it contains an additional ground for refusing recognition and enforcement (viz. lack of reasons or signature) and, to that extent, is not more favorable than the Convention. See Supreme Court decision VSRH Gž 8/11-2 (May 3, 2011) (entertaining the ground of lack of reasons). However, in other respects (e.g. the writing requirement), the Law on Arbitration is more liberal than the Convention. The alternative regime under Czech law (Act no. 91/2012 Coll. on International Private Law) appears to provide defenses to recognition and enforcement beyond those in the Convention, as does the alternative regime under Georgia law (Arbitration Law, as enforced by the Georgian Supreme Court).
51.
See, for example, the national report for Uruguay. The Russian national report sets out a particularly long list of alternative treaty mechanisms. The Chinese national reporter estimates that China has entered into more than 50 bilateral judicial assistance treaties mandating mutual recognition and enforcement of awards. The Italian national report accounts for around 100 bilateral conventions.
52.
The European Convention contains several provisions that limit an award debtor’s defenses against the recognition or enforcement of a foreign award.
53.
The Austrian national report cites bilateral treaties for the recognition and enforcement of foreign arbitral awards with Germany (1960), Belgium (1961), Switzerland (1962), Liechtenstein (1975) and the former Yugoslavia (now applicable to Macedonia, Croatia, Kosovo, Montenegro and Slovenia).
54.
The Panama Convention was signed in 1975 and subscribed to by 17 nations in the Americas. Each State party must, or at least may, define the Panama Convention’s relationship to the New York Convention. According to a reservation by the U.S., unless the parties expressly agree otherwise, if a majority of the parties involved in an arbitration are citizens of Panama Convention States, the Panama Convention, if applicable, takes priority over the New York Convention. Otherwise, the New York Convention prevails. (The U.S. also interposed a reciprocity reservation.) To enhance uniformity of application between the two Conventions, the U.S., upon implementing the Panama Convention statutorily through Federal Arbitration Act (FAA) Chapter 3, incorporated by reference many of the provisions found in FAA Chapter 2, implementing the New York Convention. Even so, there are some not insignificant differences between the two Conventions.
55.
This ambiguity is underscored in particular in the national report for Japan.
56.
The Dutch report underscores that when national courts “refer” parties to arbitration, they neither issue a declaration that the arbitration agreement is valid and binding nor “compel” arbitration.
57.
The same may be said as to the question whether an arbitration agreement is mandatory or optional. The Malaysian national report discusses two cases raising this question.
58.
The apparent assumption among national reporters is that arbitration agreements may be denied enforcement under the Convention only if found to “null and void, inoperative or incapable of being performed,” and not on any other ground. The Israeli reporter thus takes issue with the Israeli Supreme Court’s suggestion that in exceptional cases a court may decline to enforce an arbitration agreement without finding the agreement “null and void, inoperative or incapable of being performed.” See hotels.com v Zuz Tourism Ltd. and Hotels Online Ltd., Case no. 4716/04. Tak-Supreme 2005(3), 2989 (Sept. 7, 2005) (agreement may be denied enforcement for lack of good faith, as broadly defined under Israeli law, of the party seeking enforcement); Proneuron Biotechnologies Ltd. v Teva Pharmaceutical Indus. Ltd., Case no. 1817/08, Nevo electronic database (Oct. 11, 2009) (agreement may be denied enforcement if there is deep public interest in the case that would militate in favor of proceedings in open court). Arguably, lack of good faith is an accepted defense to the enforcement of contracts and therefore a basis for finding an arbitration agreement “null and void, inoperative or incapable of being performed;” however this ground should be used with caution and not given a wide interpretation as may be the case under domestic law.
59.
According to the Japanese national report, courts and scholars have identified no “substantive criteria” for determining the validity of an arbitration agreement. The matter is unsettled elsewhere as well, as in Venezuela.
60.
The Indian national report is explicit about the reliance of national courts, for purposes of Art II of the Convention, on Indian contract law and in particular on the Indian Contract Act 1872, citing several cases for this proposition. See, for example, Ramasamy Athappan v Secretariat of the Court, International Chamber of Commerce, France, (2009) 3 ml 84 (Madras High Court). The national reports for Indonesia the Netherlands, and Turkey likewise make specific reference to the general law of contract. The same approach is implicit in the United Kingdom national report.
61.
A leading U.S. decision to this effect is Moses H. Cone Mem’l Hosp. v Mercury Constr. Corp., 460 U.S. 1, 24 (1983).
62.
See, for example, the national report for Australia.
63.
See the national reports for Australia, Austria, Canada, the Czech Republic, Germany, Korea, and Macau. According to the Swedish national report, “[g]enerally, an agreement to arbitrate is treated as any other commercial agreement, and thus subject to general principles of contract law.” Swedish law, doubtless like others, treats incapacity of parties as a contract defense differently, subjecting that issue to “the law applicable to them,” which in the case of corporate authority may be the law of the place of incorporation.
The volume of decided cases among the jurisdictions is highly variable. The national reports for Australia cite a large number of cases. The national reports for Croatia, Japan, and Korea cite many fewer. And the national reports for other jurisdictions (e.g., Argentina, Brazil, Ireland, Macau, Norway, Paraguay, Peru, Portugal, and Uruguay) report no cases at all. Perhaps surprisingly, Singapore is apparently within the latter category, although its courts have had occasion to rule on the existence of an arbitration agreement and on whether it binds a non-signatory. They have also firmly taken the view that, unless an agreement to arbitrate is found to be invalid, it must be enforced. See, e.g., Coop Int’l Pte Ltd. v Ebel SA, [1998] SGHC 425, para 12; Transocean Offshore Int’l Ventures Ltd. v Burgundy Global Exploration Corp., [2010] SGHC 31, paras 28–29. But see Tjong Very Sumitomo & Ors v Antig Investments Pte Ltd., [2009] SGCA 41, para 24.
64.
On this point, see the national report for Georgia.
65.
The agreement may cease to have effect due, for example, to a statutory intervention, a court order, a subsequent arbitration agreement, frustration of contract or fundamentally changed circumstances, bad faith, failure to meet form requirements for a valid contract, discharge or waiver, or a settlement of the dispute. For a catalogue of this sort, see the national report for India. One U.S. court has held that when parties to an arbitration agreement waive their right to arbitrate, the agreement is not merely “inoperative,” but actually “null and void.” Apple & Eve LLC v Yantai N. Andre Juice Co., 610 F.Supp. 2d 226 (E.D. N.Y. 2009). Waiver would appear to entail inoperativeness rather than nullity, but in fact the choice of categories makes no difference.
66.
Here too a number of different scenarios may be posited. The arbitrator or institution named may no longer exist or be available, or the clause may be internally contradictory (the so-called “pathological” clause). On this, see in particular the national reports for Croatia and India. For an extended discussion of pathological clauses, see the national report for Italy, which offers a particularly colorful example. A contract between an Italian and Syrian firm provided that “[a]ny dispute … shall be settled by a sole arbitrator [who] shall be expert in Swiss law and in the production of Arabic bread.” No one satisfying both conditions could be found, and the arbitration agreement was denied enforcement.
Unsurprisingly, it was held by an English court that the refusal of a party to pay the required advance on costs is not sufficient to render the arbitration agreement incapable of being performed. See El Nasharty v J. Sainsbury PLC, [2007] EWHC 2618 (Comm). For similar results, see the reports for Canada (Burlington Northern RR Co. v Canadian Nat’l Rwy Co., [1997] 1 SCR 5, 34 BLR (2d) 291)).
67.
On this point, see the national report for Georgia.
68.
Various reports emphasize this point. See, for example, the national reports for Australia, Germany, and Japan. The Israeli national report is critical of the failure by courts in some instances to give effect to the separability principle, deciding the validity of an arbitration agreement when the challenge to it was in effect a challenge to the main contract.
69.
See, for example, the case of Comandate Marine Corp. v Pan Australia Shipping Pty Ltd, [2006] FCAFC 192 (Australia).
70.
See, for example, the cases of OLG Hamm, 29 Sch 1/05, SchiedsVZ 2006, 106, paras. 23-26 (Sept. 27, 2005) (Germany); Case 89 Daka 20252, Supreme Court, April 10, 1990 (Korea).
71.
See in particular the Malaysian national report, citing four judicial decisions as evidence for this proposition. See also the national reports for Portugal and Sweden.
72.
This questionable prospect is alluded to in the Singapore national report.
73.
See notes 47, 48, and accompanying text.
74.
Code of Civil Procedure, art 1448. The French position reflects the co-called “negative” dimension of Kompetenz-Kompetenz, meaning that not only may arbitral tribunals determine their own jurisdiction, but courts may not do so at the outset except in the narrow situation of a manifestly null or manifestly inapplicable arbitration agreement. According to the French report, manifest nullity in an international arbitration case has never been found by a court, while manifest inapplicability has been found on a number of occasions.
75.
There is no settled choice of law rule in Macau and Vietnam. This is evidently also the case in Japan, where uncertainty and disagreement over the applicable law prevail. Curiously, according to the Japanese national report, no choice of law rule prevails for determining the validity of the arbitration agreement under Art II of the Convention, but a choice of law rule exists for determining the scope of the agreement. The report highlights a case involving a “cross-style” arbitration agreement providing for arbitration in New York if sought by the Japanese party and in Tokyo if sought by the American party. In the absence of a choice of law clause, the Supreme Court of Japan treated the scope of the agreement as subject to U.S. law because the arbitral situs in that case was New York. Case 51-8 Minshu 3657, Jap. Annual of Int’l L 1998, 41, 109 (1997).
76.
See, for example, the national reports for Croatia, Germany, Greece, India, Peru, Portugal, and Romania. This is also the general practice in the United States, although the national report suggests that U.S. courts sometimes simply apply the law of the forum (citing the cases of Corcoran v Ardra Ins. Co., Ltd., 77 N.Y.2d 225 (N.Y. 1990); Freudensprung v Offshore Tech. Servs, Inc., 379 F.3d 327 (5th Cir. 2004); and Appole & Eve LLC v Yantai N. Andre Juice Co., 610 F. Supp. 2d 226 (E.D. N.Y. 2009)).
77.
This approach appears to be the approach taken in Australia, Austria and Canada.
German scholars evidently favor following the sequence laid down in Art V(1)(a) of the Convention, though the German courts appear to favor application of the conflict of laws rules of the forum.
Swiss law is particular in this respect. If the arbitration is seated abroad, the courts will follow the choice of law sequence laid down in Art V(1)(a) in deciding the arbitration agreement’s validity. However, if the arbitration is seated in Switzerland, that determination is made in accordance with the Swiss Private International Law Act (PILA), which presumably means Swiss conflict of laws rules. The Convention in Art V(1)(a) provides, in the context of recognition and enforcement of awards, that the validity of the arbitration agreement is to be determined “under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made.” The question has arisen whether the term “under the law to which the parties have subjected it” refers only to choices of law contained in the arbitration clause itself and not to general contractual choice of law clauses. If that is the case, in the absence of a specific choice of law reference in the arbitration clause, the law applicable to the validity of the arbitration agreement would be “the law of the country where the award was made.” Effect would not be given to a general choice of law provision in the contract. However, the reported results suggest that the term “under the law to which the parties have subjected it” is to be read broadly to include both choice of law provisions contained in the arbitration clause itself and general contractual choice of law clauses. For additional treatment, see Sect. 3.4.2.1 of this report.
78.
One jurisdiction whose courts take this view is China. See Mitsubishi Corp. (Hong Kong) Ltd. v Yangtze Three Gorges Investment Co, NSC. 1999 Jing Final no. 426. Others include the Czech Republic, Germany, Taiwan, and the United Kingdom. It is decidedly also the case in the Netherlands, though disagreement persists over the law to which Dutch conflict of law principles point. Perhaps as a result, a proposed reform of Dutch law would subject the arbitration agreement’s validity to “the law chosen by the parties or the law of the place of arbitration or, if the parties have made no choice for the applicable law … the law governing the legal relationship with respect to which an arbitration agreement has been concluded.” The Japanese Supreme Court has largely adopted this view (see Case 51-8 Minshu 3657, Jap. Annual of Int’l L 1998, 41, 109 (1997)), though according to the national report uncertainty continues to prevail.
Even in the U.S., there is authority to the effect that, though a contract contains a specific choice of law clause, courts apply the law of the forum to decide whether an agreement is null and void, inoperative or incapable of being performed. See Matter of Ferrara S.p.A, 441 F. Supp. 778 (S.D. N.Y. 1977).
79.
Russian courts apply the lex fori—Russian law—to the question of the arbitration agreement’s validity. The Croatian courts, in a clear pro-arbitration move, reportedly apply either the chosen law or forum law, whichever will lead to the validity of the arbitration agreement.
80.
See, for example, the national report for Brazil.
81.
Even in some jurisdictions (such as Australia and Austria) having an abundant international arbitration case law, there is no answer from the courts (though there is a good deal of academic commentary). See also the national reports for Hungary, Paraguay and Uruguay.
The Romanian national report is unclear and even contradictory on this point. On the one hand, the report states that a court need not refer the parties to arbitration “if the arbitration agreement is null or inoperative.” It goes on, however, to state that “[p]rior to the arbitration … the validity of the arbitration agreement is not capable to be examined by the national (Romanian State) court.” As for the Russian report, it is silent on the allocation of authority question.
82.
See Buckeye Check Cashing v Cardegna, 546 U.S. 440 (Feb. 21, 2006).
83.
In Indonesia, for example, the courts are not allowed under any circumstance to entertain objections to arbitration provided it is established that a valid arbitration agreement exists.
84.
By way of example, in China, according to the national report, “an objection to arbitration may be raised at the beginning of arbitration proceeding[s] to either the arbitration commission [i.e. the arbitral institution under whose aegis the arbitration is to take place] handling the application for arbitration or the court on the ground that there is no valid arbitration agreement” (emphasis added). See Arbitration Law, art 20. The question of whether there is a valid arbitration agreement in China is viewed broadly to include also the question whether a given dispute falls within the scope of the arbitration agreement, assuming it exists. Interestingly, Art 20 specifies that if one party brings the validity question to the arbitration commission and the other brings it to a court, the court will decide the matter, and in the interim the arbitration itself will be stayed. Judicial proceedings on the validity question obviously take precedence.
85.
The Israeli and Venezuelan reporters state that courts enjoy and exercise power to entertain a large number of objections to the jurisdiction of arbitral tribunals.
86.
“Procedural arbitrability” issues in the U.S. include, notably, claims that a party waived its right to arbitrate, failed to initiate arbitration on a timely basis, or neglected to satisfy conditions precedent to arbitration.
87.
A court will intervene at the outset under French law only if the arbitration agreement relied upon is “manifestly” invalid or inapplicable. French courts may intervene, on the other hand, to facilitate the arbitration, for example by naming arbitrators when necessary.
88.
See the national reports for Argentina, Italy, Japan, Paraguay, and Peru.
89.
See Case 1400/2008, Annals of Private Law 2009.335 (Greek Supreme Court). It is apparently unsettled in Ireland whether a court’s inquiry into the validity of an arbitration agreement prior to arbitration should be conducted on a prima facie or a de novo basis. In Barnmore Demolition & Civil Engineering Ltd. v Alandale Logistics Ltd. & Ors, [2010] no. 5910P (Nov 11, 2010), the court noted the distinction in the following terms, but did not decide the issue because it found the agreement, even under a prima facie standard, not to exist:

The entitlement of both the Court and the arbitral tribunal to rule on the existence of an arbitration agreement has given rise to extensive discourse. In light of the fact that both a court and the arbitral tribunal have jurisdiction to consider and rule on the existence of an arbitration agreement the issue arises as to the standard of judicial review which should be applied by the Court in exercising its jurisdiction under the Model Law [citing Gary B. Born, International Commercial Arbitration, for the proposition that some courts make a de novo determination and others only a prima facie determination].

In a similar vein, Portuguese law requires a court to refer parties to arbitration “unless it finds that the arbitration agreement is manifestly null and void, is or became inoperative or is incapable of being performed” (LVA, art 5(1)). The Portuguese reporter describes this provision as confining courts, prior to arbitration, to only a prima facie review of the arbitration agreement’s validity, operativeness and capacity to be performed. In the absence of case law in Macau, the national reporter points to a decision of the Supreme Court of Portugal (a country whose law is commonly looked to in Macau to fill gaps), confirming that Portuguese courts should refer the parties to arbitration unless the invalidity of the arbitration agreement is, to quote the reporter, “clear and undisputed.” Case no. 2207/09.6TBSTB.E1.S1 (Jan. 20, 2011); Case no. 5961/09.1TVLSB.L1.S1 (Mar. 10, 2011).
90.
Dell Computer Corp. v Union des consommateurs, 2007 SCC 34, 284 DLR (4th) 577.
91.
A good example is Croatia. According to the Croatian national report, courts will not entertain challenges to arbitral jurisdiction prior to the arbitration, but they will determine the validity or invalidity of an arbitration agreement prior to arbitration if their own jurisdiction depends on that. This formulation is problematic. It suggests that courts prior to arbitration both can and cannot determine the validity of an arbitration agreement.
92.
The Indonesian national report is critical of the Indonesian courts in this connection. The national report, though without citing specific authority, asserts that “the courts are not allowed under any circumstances to entertain objections to arbitration while an arbitration exists.” But the practice of the Indonesian courts is evidently otherwise. See Perusahaan Dagang Tempo v Roche Indonesia, Case no. 454/PDT.G/1999/PN.JAK.SEL (South Jakarta Dist. Ct, Jan. 25, 2000) (nature of case makes court a more suitable forum than arbitral tribunal); Perusahaan Listrik Negara (PLN) v Paiton, Case no. 517/Pdt.G/1999/PN.JKT.PST (Central Jakarta Dist. Ct, Dec. 13, 1999) (disregarding the separability principle and deciding merits of dispute because main contract containing the arbitration clause was invalid). The national reporter regards such decisions as raising doubts about the Indonesian legal system in regard to arbitration.
93.
Thus, in the well-known Chinese case of Duferco S.A. v Ningbo Arts & Craft Import & Export Co., Ltd., 2008 Yong Zhong Jian Zi no. 4 (Apr, 22, 2009), the court, having found the award (though rendered in China) to be a Convention award, enforced it over the award debtor’s contention that the arbitration agreement was invalid under Chinese law. The court found no ground in the Convention that could justify a denial of enforcement.
94.
See, for example, the national reports for Argentina, Australia, Croatia, Ireland, Israel, Italy, Japan, Korea, Macau, Malaysia, Paraguay, Portugal, Uruguay, and Venezuela. In some of these jurisdiction, the reporters, while unable to find any case deciding the issue, either predict or express strong support for the view that courts have the discretion to grant recognition and enforcement despite the presence of a ground for denying it. See, in particular, the national reports for Israel, Japan, Peru, Singapore, Slovenia, and Sweden.
In other jurisdictions, the issue is simply not addressed in the national reports. These include Brazil, Hungary, and Indonesia.
95.
See, for example, the national report for Austria.
96.
See, for example, the Czech Republic and certain Canadian provinces. Courts in India have not thus far chosen to recognize or enforce an award despite the presence of a defense to recognition or enforcement, but the one court to address the issue has expressly, in effect by way of dictum, confirmed the courts’ authority to do so in a proper case. Glencore Grain Rotterdam B.V v Shivnuth Rai Havnarain, (2008) 4 Arb. L.R. 497 (Delhi High Court).
French courts have recognized and enforced foreign awards despite the presence of a ground for refusal. But the only examples provided by the French report involve the recognition or enforcement of awards that could have been denied recognition or enforcement because set aside in the place of arbitration under Art V(1)(e) or its equivalent in domestic French law. Similarly, the only examples offered in the Dutch and U.K. reports deal with the recognition or enforcement of annulled awards.
97.
Evidently, the prevailing view in Greece, Romania, Switzerland, and Turkey is that the Convention grounds are mandatory and therefore, if established, cannot be disregarded. Under what the Greek national reporter terms a “territoriality approach,” the annulment of a foreign award leaves nothing to enforce. Thus, Greek courts feel obliged to deny recognition and enforcement of an award if there are grounds that would justify doing so. The German courts likewise regard the Convention grounds as in principle mandatory. See, e.g., BGH, KZR 7/65, BGHZ 46, 365 (Oct. 25, 1966); OLG Düsseldorf, VI-Sch (Kart), 1/02, IPRspr 2004/195, 443, para 25. However, they may overlook a defense to recognition and enforcement under alternative statutory or treaty enforcement regimes.
In China, a court may recognize and enforce a New York Convention award despite the presence of a ground in domestic law for refusing to do so, but may not recognize and enforce a New York Convention award despite the presence of a ground under the Convention for refusing to do so.
98.
This is the case in Canadian provincial courts, for example. See e.g. Louis Dreyfus & Cir v Holding Tusculum, bv, 2008 QCCS 5903; Rhéaume v Société d’investissements l’Excellence Inc., 2010 QCCA 2269, [2011] RJQ 1. See e.g. Europcar Italia SpA v Alba Tours International Inc., (1997), 23 OTC 376 (available on WL Can) (Ct J (Gen Div)); Javor v Francoeur, 2003 BCSC 350, 13 BCLR (4th) 195; Schreter v Gasmac Inc., (1992), 7 OR (3d) 608 (Ct J (Gen Div)). A fortiori, a foreign award may be recognized or enforced even though under challenge in a court of the place of rendition. See Schreter v Gasmac Inc., ibid.
99.
The Taiwan national report contains a suggestion that courts may likewise consider non-arbitrability and offense to public policy as non-excusable defects, but not other grounds for denying recognition or enforcement.
100.
See, for example, the Czech Republic (where the violation is de minimis).
101.
See, for example, Norway (where the non-conformity did not have an impact on the arbitral decision).
102.
The Hong Kong report emphasizes how, rather than appear to enforce an award notwithstanding the presence of a ground for non-enforcement, courts tend to find that the ground simply has not been established. Courts may also find that no party’s rights were materially violated or no real prejudice was suffered (a kind of “harmless error” approach). In so doing, a court enforces the award, not in spite of the presence of a ground for refusing to do so, but rather because the ground has not been sufficiently established.
103.
See Rhéaume v Société d’investissements l’Excellence Inc., [2010] QCCA 2269, [2011] RJQ 1.
104.
Waiver of this sort is mentioned in several national reports (see the reports for Germany, Israel, Italy, Malaysia, and Sweden), but is especially developed in the report for France. The new Art 1466 of the French Code of Civil Procedure codifies earlier case law inferring waiver from a party’s abstention (i.e., failure to object). In Peru, Art 75 of the Arbitration Law expressly precludes refusal of recognition or enforcement on grounds corresponding to Art V(a) of the Convention unless raised on a timely basis in the arbitral proceedings.
Swiss law takes very much the same position. Art 182(2) PILA requires that parties raise challenges to the validity of the arbitration agreement or to arbitral jurisdiction “prior to any defense on the merits.” Although this provision only applies to arbitration conducted in Switzerland, it evidently has a bearing on the recognition and enforcement of foreign awards. According to the national report, “[i]f a plea of lack of jurisdiction is not timely raised, the party is deemed to have tacitly submitted to arbitration; therefore, that party cannot challenge the jurisdiction of the tribunal anymore, not even at the stage of the recognition and enforcement of the award” (emphasis added), citing DFT 4A_124/2010, reason 6.3.3.1 (Oct. 4, 2010), drawing upon DFT 135 III 136, 139; DFT 110 1b 191, 195; DFT 108 1b 85, 87. Waiver would equally result from failure to object to flaws in the composition of the tribunal or the arbitral procedure. DFT 4P 298/2005 (Jan. 19, 2006).
In the Netherlands, however, the possibility of waiver by failure to object is more limited. Curiously, failure to object to the tribunal does not preclude objections to enforcement based on improper constitution of the tribunal or excess of arbitral authority. (It also understandably does not preclude a defense of non-arbitrability.) The 2014 proposed reform would broadly codify the principle of waiver for failure to object to the tribunal.
105.
On the possible difference between waiver (renonciation) and estoppel, see the French national report. Evidently, waiver denotes simply silence or a failure to object, while estoppel also presupposes reliance by the opposing party to its detriment. Some authors, though not the French national reporter, are reportedly of the view that, while public policy objections cannot be waived, they can be subject to estoppel. (The notion of estoppel, though originating in common law jurisdictions, has been accepted in French law. See Golshani, Cass. 1re civ, Rev arb. 2005.993, D. 2005.3060, JCP 2005 I 179 (July 6, 2005)).
106.
See, for example, the national reports for Argentina, Australia, China, Ireland, Macau, Malaysia, Paraguay, Singapore, and Uruguay. The issue is not addressed in the national reports for Georgia, Hungary, Indonesia, Japan, and Vietnam.
107.
The Canadian report, for example, draws no distinction among the grounds in this respect; all appear to be waivable. See Food Servs of America Inc. v Pan Pacific Specialties Ltd, (1997), 32 BCLR (3d) 225 (SC).
108.
See, for example, the national reports for Brazil, Italy, Sweden, Turkey, and Venezuela. The Swiss national report expressly endorses this position.
Though there is apparently no case law on point, the Austrian reporter mentions the possibility of an ex-post waiver (i.e. after the arbitral award has been rendered) subject, however, to the important proviso that by the time of the purported waiver “these grounds have surfaced and have been recognized by the parties.”
109.
For example, the Czech courts reportedly disallow waiver not only of the grounds in Art V(2), but also of a claim that no valid arbitration agreement was ever entered into or a claim of fraud or the like. Similarly, in Israel, waiver of the grounds set out in Art V(2) is disallowed, but so too is waiver of objections based on fraud, bias, or nullity of the agreement to arbitrate.
110.
See, e.g., Croatia, Greece, Hong Kong, Norway, Romania, Slovenia, and the United Kingdom. This seems also to be the case in Korea.
111.
Obviously the grounds are not mandatory in every sense of the term. In these jurisdictions, parties may not waive in advance of a dispute the right to resist recognition or enforcement of an award or waive in advance certain Convention grounds, but they may refrain, on a post-dispute basis, from raising all the grounds at their disposal for resisting recognition or enforcing of an award or from resisting recognition or enforcement altogether. Also, as we have seen, an overwhelming number of countries give courts the discretion to recognize or enforce an award, notwithstanding the presence of a ground that would justify a refusal to do so.
112.
See PILA, art 192(1).
113.
According to the Swiss national reporter, “the fact that the parties are allowed to waive all or some of the grounds for setting aside an award rendered in Switzerland can be interpreted as an indication that a similar waiver is also possible with respect to the grounds for denying the exequatur. As a matter of fact, the grounds for setting aside under Art 190(2) PILA are largely equivalent to the grounds for refusal under Art V [of the New York Convention]. If these grounds are not mandatory with respect to arbitration, why should they be mandatory when the arbitration has its seat abroad?”
114.
Similarly, according to the Peruvian report, the Law on Voluntary Arbitration (LVA), art 46(4), generally precludes a party from asserting grounds for annulment that were not brought to the attention of the arbitral tribunal on a timely basis. The reporter reasonably suggests that the same rule may be applied by analogy to proceedings for recognition and enforcement of foreign awards.
115.
Significantly, the Quebec Civil Procedure Code provides that no arbitration agreement may derogate from the provisions governing the annulment of awards, but contains no comparable provision as regards the grounds for defeating enforcement. RSQ c C-25, arts 940, 947-947.7.
116.
See e.g., BGH, VII ZR 32/67, BGHZ 52, 184 (June 26, 1969).
117.
The Court found that the Civil Procedure Code, as amended, no longer permitted preclusion on the ground of failure to seek annulment. BGH, III ZB 100/09, BGHZ 188, 1, SchiedsVZ 2011, 105, paras. 8–10 (Dec. 16, 2010). However, the Court opened the door to preclusion based upon a lack of good faith in a case in which the award debtor led the award creditor to believe that he would not object on that ground to enforcement of the award. Id., para 13–18. The fact remains that, as the German reporter puts it, “the mere fact that [a party] did not apply to have the award set aside in the country of origin was not enough to be precluded from later raising that objection” (emphasis in original). Preclusion is almost certainly ruled out if that party strongly objected during the arbitration. Case law recognizes an important exception, however. Enforcement cannot be objected to on grounds of arbitrator partiality (even if clothed as a public policy objection) if that objection could have been invoked before a court of the country of origin and was not, provided the foreign law on that matter reflected German law principles. BGH, III ZR 218/89 (July 12, 1990).
118.
The Swiss report states that inferring waiver in those circumstances “would go too far.”
119.
See, for example, the national reports for Argentina, Canada, China, Hungary, Japan, Korea, Macau, Peru, Portugal, Singapore, and Uruguay.
120.
The Chinese national report highlights the greater deference that may be shown to earlier judicial as compared to arbitral determinations in the same case on issues pertinent to the presence or absence of a Convention defense to enforcement.
121.
See, for example, Brazil, India, Malaysia, and Taiwan. On India, see Lal Mahal Ltd. v Progetto Grano Spa, civil appeal no. 5085 (July 3, 2013). German courts, in entertaining actions to enforce foreign awards, reportedly tend to show at least some deference to judicial pronouncements made in the course of set aside actions by courts of the place of arbitration. Those pronouncements may possibly even be considered as conclusive.
122.
According to the Israeli report, the extent of deference toward a prior judgment should depend on the closeness of the connection between the parties or case, on the one hand, and the jurisdiction whose court issued that prior judgment, on the other.
123.
See the national reports for Australia, Croatia, Paraguay, and Switzerland.
124.
See, for example, Austria, China, Croatia, the Czech Republic, France, Greece, Italy, Norway, Romania, and Venezuela.
125.
According to the Dutch national report, “the … court itself would examine whether there are grounds to refuse the enforcement if raised by the party opposing … enforcement.”
126.
See, for example, Canada and Switzerland.
127.
See Astor Nusantara International BV v PT Ayunda Prima Mitra, HCCT 45/2010 (High Court of Hong Kong Special Administrative Division, Mar. 21, 2012).
128.
The Greek national report is emphatic in this regard.
129.
See, for example, the national reports for Argentina, Croatia, the Czech Republic, Georgia, Indonesia, Ireland, Israel, Japan, Macau, Paraguay, Peru, Portugal, and Uruguay.
130.
Hong Kong Arbitration Ordinance, s 89(2)(b).
131.
The Arbitration & Conciliation Act, 1996, art 34 (2)(a)(1).
132.
Civil Code, arts 2.637-2.638.
133.
International Arbitration Act, s 31(2)(b).
134.
Code of Civil Procedure, art 370(1)(b). For a recent application, see case no. 90/2013/QD.KDTM-PT (Court of Appeal, Ho Chi Minh City, April 18, 2013).
135.
The Brazilian national report cites Case no. SEC 3709 (June 2012).
136.
The Chinese national report correctly points out, however, that even if a court follows the choice of law sequence prescribed by Art V(1)(a), there is some room for application of forum law. More specifically, the enforcing court, even while giving effect to the law to which the parties “subjected” their agreement, must still make a determination as to whether the parties did “subject” their agreement to a given law, and to determine that the court looks to the conflicts of law rules of the forum. In other words, the sequence spelled out in Art V(1)(a) does not tell the whole story.
137.
Owerri Commercial Inc. v Dielle Srl, Court of Appeal, the Hague (Feb. 22, 2000).
138.
Decision 89 Daka 20252 (Supreme Court, Oct. 4, 1990).
139.
DFT Bull. ASA, para 261 (Mar. 21, 1995); ZH, Bull. ASA, p. 265 (May 26, 1994).
140.
See, for example, the national reports for Australia, Canada, China, Greece, India, Slovenia, Sweden, Turkey, United Kingdom, and Venezuela.
141.
In some jurisdictions, the courts have applied to the validity question the law chosen by the parties, but have not had to decide which law to apply in the absence of a choice. See, for example, Hungary and Italy. It cannot be said with assurance what law would be applied in those circumstances, though application of the law of the arbitral seat would seem sensible.
142.
Arbitration Act, art 50 (1), item 2.
143.
Achilles (USA) v Plastics Dura Plastics (1977) ltée/Ltd, [2006] QCCA 1523. Note that in this case, while the law of the underlying agreement (State of Washington) was found to apply to the arbitration agreement, this law was taken to be “similar” to Québec law because no proof of the relevant foreign law had been adduced.
144.
In Germany, see, for example, OLG Dresden, 11 Sch 8/07, IPRax [2010], 241 (Dec. 7, 2007), subjecting the validity of an arbitration agreement between a Dutch and German party, providing for arbitration in New York, to the law of Liechtenstein, which was designated in the choice of law clause of the main contract. On this issue, see also the Slovenian national report.
145.
In Norway, a general choice of law clause is not deemed to apply to the arbitration clause in a contract. If that clause does not state its own choice of law, reference is made to the law of the place where the award was rendered. Arbitration Act, s 46(1)(a). The case law is in accord.
146.
See, e.g., BGH, III ZB 69/09, BGHZ 187, 126, SchiedsVZ 2010, 332 (Sep. 30, 2010), para 12, stating that “[if] the arbitration agreement is valid pursuant to the national procedural law of the enforcing state – that is, ZPO s 1031 – it is not relevant anymore whether, within the framework of [Convention] Art V(1)(a), this is also the case pursuant to the law of the country where the award was made.”
147.
See notes 47-48 and accompanying text.
148.
Dalico, Cass. Civ 1re, Rev arb. 1994.116, JDI, 1994.432 (Dec. 20, 1993). French courts also invoke the so-called principe de validité, according to which arbitration agreements enjoy a presumption of validity; only in exceptional cases (as where the underlying claim is by law non-arbitrable) is the presumption overcome. See e.g., Zanzi, Cass. 1re civ, Rev arb. 1999.260 (Jan. 5, 1999).
149.
See the Austrian Supreme Court decision of March 30, 2009, docket no. 7 Ob 266/08f.
According to the Israeli report, unless the parties specifically plead the foreign law indicated by the Convention sequence of choice of law rules, courts are unlikely to follow that sequence.
150.
Chinese courts reportedly do not apply the same due process standards as required by domestic constitutional law because there is in fact no procedural due process guarantee in the Chinese Constitution.
151.
The U.K. Arbitration Act, s 68, spells out in some detail the requirements of fair procedure, but that section deals with the annulment of awards rather than their recognition and enforcement. The supposition must be that the standards on the two occasions are comparable.
152.
The German report is emphatic. The right to be heard in arbitration mirrors the right to be heard as guaranteed by Art 103(1) of the German Constitution and does not differentiate between arbitral proceedings conducted on national territory and arbitral proceedings conducted abroad. The German report cites an abundant case law to this effect.
The Canadian reporters state that “within the arbitral context, the requirement for proper notice and a fair hearing is equivalent to the ordinary standards of natural justice and procedural fairness.” However, in Canada, this standard is not, strictly speaking, a “constitutional” standard but more in the nature of an “administrative law” standard.
153.
Among the jurisdictions in this category are Brazil, the Czech Republic, Italy, Slovenia, and Taiwan. Austria appears to be in that category, since it is stated that not every infringement of the right to be heard justifies denying effect to an award.
The situation in the U.S. is somewhat ambiguous. Courts commonly apply something resembling constitutional due process standards in deciding whether the arbitral procedure was fundamentally fair. However, some courts emphasize that arbitral hearings need meet only “the minimal requirements of fairness,” notably “adequate notice, a hearing on the evidence, and an impartial decision by the arbitrator.” Karaha Bodas Co. LLC v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274, 301 (5th Cir. 2004).
154.
Code of Civil Procedure, arts 1520-4, 1520-5. The international standard is based upon le principe de la contradiction, which is said to demand that the parties were able to make their claims known in fact and in law and to address the claims of their adversary so that nothing that serves as a basis for the decision of the arbitrators will have escaped the adversarial process (une discussion contradictoire des parties). See also Code of Civil Procedure, art 1464.
155.
The Swiss report, citing academic doctrine, remarks that “[a]lthough the enforcing court will probably be tempted to look into the law of its own country, for the purpose of consistent application of Art V(1)(b), the court seized should base its decision on general criteria applicable in all contracting states.”
156.
According to the Austrian report, not every infringement of the right to be heard will suffice to justify a denial of recognition or enforcement. Fundamental principles must have been violated. See also the national reports for Canada, India, Ireland, the Netherlands, and Peru.
157.
See the Hong Kong case of Paklito Investment Ltd v Klockner East Asia Ltd, [1993] 2 HKLR 39, refusing enforcement where the party opposing enforcement had not been allowed to comment on or challenge the reports submitted by the tribunal’s appointed experts. A similar Hong Kong ruling is Apex Tech Investment Ltd v Chuang’s Development (China) Ltd, [1996] 2 HKLR 155.
158.
See Corporacion Transnacional de Inversiones, SA de CV v STET International, SPA, (1999) 45 OR (3d) 183 (Sup Ct).
159.
See the national reports for Germany, India, Japan, and Singapore. The matter is the subject of debate in Switzerland.
160.
On this point in particular, see the Chinese, Peruvian, Singapore, and Swiss national reports.
161.
Decision of the Supreme Court (HR) of 25 May 2007, Anova Food B.V, NJ 2007, 294; LJN BA2495; see also, decision of the Supreme Court (HR) of 24 April 2009, IMS v Modsaf, NJ 2010, 171. RvdW 2009, 580; JBPr 2009, 54 NJB 2009, 923.
162.
See, for example, the national reports for France, Georgia, the Netherlands, and Sweden.
163.
See, for example, the national reports for the Czech Republic, Israel, and Portugal.
164.
These countries include Australia and Switzerland. The cases in Germany are described as being few.
165.
See, e.g., Argentina, Austria, China, Greece, Hungary, India, Italy, and the United Kingdom. In China, Art V(1)(c), on excess of arbitral authority, has been used to deny enforcement of an award as against a non-party to the arbitration agreement. The tribunal is deemed to have exceeded its authority when it renders an award against a party that cannot be considered to be a party to the arbitration agreement and therefore cannot be bound either by the agreement or the award. See Gerald Metals Inc. v Wuhu Metal Plant and Wuhu Henxin Copper Group Co., Ltd., Provincial Supreme Court of Anhui (2003), available at: http://www.lawxp.com/statute/s540605.html.
166.
See, for example, the national reports for China, Hong Kong, Italy, and Korea.
167.
For this precise proposition, see the national report for Canada, citing, among other cases, Quintette Coal Ltd. v Nippon Steel Corp., (1990), 50 BCLR (2d) 207 (CA); United Mexican States v Cargill, Inc., [2011] ONCA 622, 107 OR (3d) 528; Desputeaux v Editions Chouette, Inc., 2003 SCC 17, para 35, [2003] 1 SCR 178.
168.
Some deference to the arbitral tribunal is to be expected when it comes to interpreting the breadth of the arbitration agreement, including the range of disputes it covers. In U.S. law, there is a powerful presumption that the arbitral tribunal has acted within its powers. Parsons & Whittemore Overseas v Société Générale de l’industrie du Papier, 508 F.2d 969 (2d Cir. 1974).
169.
According to the Croatian report, however, “courts would not be keen on overly broad interpretation of the scope of the arbitration agreement.” Rather, “[i]n interpreting what the parties contemplated, the intention of the parties might be judged primarily against the wording of the arbitration clause.”
170.
According to the court in one case (PT Prima Int Development v Kempinski Hotels SA & Others appeals, [2012] 4 SLR 98, at §33), “[t]he role of pleadings in arbitral proceedings is to provide a convenient way for the parties to define the jurisdiction of the arbitrator by setting out the precise nature and scope of the disputes in respect of which they seek the arbitrators’ adjudication.” The Swedish national report likewise views the parties’ submissions as a basis for determining the scope of the arbitration agreement.
171.
Telestat Canada v Juch-Tech Inc., [2012] ONSC 2785, 3 BLR (5th) 282.
172.
General Organization of Commerce and Industrialization of Cereals of the Arab Republic of Syria v S.p.A. SIMER, CA Trento [1981] VIII YBCA 386 (1983), where the arbitral tribunal decided on technical matters even if it was competent only to decide on non-technical issues.
173.
The Romanian report cites a decision rejecting the argument that an award may be annulled where the tribunal awarded a party a greater sum of money in damages than it had requested.
174.
The German reporter views this response as reflecting the general absence from German law (unlike the common law) of a sharp distinction between “rights” and “remedies.”
175.
A broadly analogous question is whether a tribunal is deemed to have acted in excess of authority in applying to the merits of a dispute a body of law other than the one designated by the parties as the governing law. See the discussion of this issue at 4.3.4 of this report, in connection with Art V(1)(d) of the Convention.
176.
See Parsons & Whittemore Overseas v Société Générale de l’industrie du Papier, 508 F.2d 969 (2d Cir. 1974); Fertilizer Corp. of India v IDI Mgmt, Inc., 517 F.Supp. 948, 958-61 (S.D. Ohio 1981).
177.
See in particular the national reports for Austria, China, France, Israel, and Norway.
178.
Italian courts denied recognition of an award rendered in the United Kingdom by two arbitrators, notwithstanding that the arbitration agreement provided for a three arbitrator panel (Rederi Aktiebolaget v Termarea [1978] IV YBCA 294 (1979) (Court of Appeal of Florence))
which Chinese courts have applied Art V(1)(d) very strictly, denying recognition and enforcement where (a) the tribunal did not render its award within the time limit established by rules of the institution designated in the parties’ arbitration agreement, (b) the tribunal did not follow institutional rules governing the appointment of a substitute arbitrator, (c) the award creditor had failed to abide by a provision in the arbitration agreement requiring the parties to conduct negotiations of a certain duration before resorting to arbitration, and (d) the institution did not handle an arbitrator’s unexpected unavailability to participate in the hearings in accordance with the institution’s own rules.
179.
The Vietnamese national report underscores the unlikelihood of a direct contradiction between the rules chosen by the parties and the mandatory rules of the arbitral situs.
180.
See Sect. 3.4.1.1 of this report.
181.
See in particular the national reports of France, Hungary, Romania, Sweden, Switzerland, and Taiwan.
182.
According to the Norwegian national report, courts would be quite prepared to enforce the mandatory law of the situs even if, in violating that law, the tribunal was giving effect to the parties’ agreement on that procedural matter. See also the national report for Venezuela.
183.
For an expression of this view, see the Swedish national report.
184.
The Swiss reporter precisely so observes: “[E]nforcement of the award will generally be sought only after the deadline for challenging … the award at the seat of arbitration has elapsed.”
185.
According to the Swiss report, it has been suggested in the literature that “the procedural irregularity … must have been causal for the outcome of the proceedings.”
186.
See Sect. 3.4.2.2 of this report.
187.
See, on this particular point, the Swiss national report.
188.
In Brazil, for example, application of the “wrong” body of law would be regarded as a merits issue and beyond review upon recognition or enforcement. The problem is regarded in France as purely theoretical, since a tribunal is unlikely to apply a different law than the parties had adopted without giving some legal justification for doing so, and to review the persuasiveness of that justification would be to enter into the merits.
189.
Pertamina v Karaha Bodas Co., case no. 86/PDT.G/2002/PN.JKT.PST (Aug. 19, 2002).
190.
See in particular the national reports for China, Taiwan, Turkey, and the United States.
191.
See Sect. 3.4.1.1 of this report.
192.
See in particular the national reports of Brazil, Hong Kong, Hungary, India, Ireland, Israel, Japan, Macau, Malaysia, Paraguay, Peru, Portugal, Russia, and Singapore.
A case raising this question is pending in the Brazilian courts. See EDF International S.A. v Endessa Latinoamerica S.A., Case SEC 5782. According to one academic view in Brazil, for a court to enforce an award that has been annulled by a competent court of the arbitral situs would infringe the 1975 Panama Convention and the 1992 Les Leñas Protocol (Mercosur), which consider recognition or enforcement of an award under those circumstances to be impermissible.
In other jurisdictions, the matter, though unaddressed by the courts, has generated much academic debate. See, for example, the national reports for Italy and Slovenia. The national reporters from these jurisdictions take a range of views. Supporting authority to enforce annulled awards is the national report for Australia, citing L. Nottage & R. Garnett, “The Top 20 Things to Change on or Around Australia’s International Arbitration Act,” in Nottage & Garnett (eds.), International Arbitration in Australia (The Federation Press, Sydney 2010), p 163. The Canadian reporters suggest that permitting courts to enforce annulled awards under the Convention is consistent with the Convention’s overall pro-arbitration philosophy. See also the national reports for the Czech Republic, Korea, and Venezuela.
National reporters from other jurisdictions either disfavor the recognition or enforcement of annulled awards or predict that national courts, when asked, will refuse to accord them recognition or enforcement. See the national reports for Romania, Sweden, Switzerland, Taiwan, and Uruguay.
193.
See, for example, the national reports for Austria, Canada, the United Kingdom, and the United States. But see the Chinese, Croatian, Greek, Korean, and Turkish reports, for example, which indicate that courts consider themselves barred from recognizing or enforcing an award that has been set aside in the seat of arbitration. However, the issue is reported to be a subject of strong debate in Chinese academic circles. Although Chinese courts will recognize and enforce a Convention award, even though a ground in domestic law for refusing its recognition and enforcement can be established, they have not recognized or enforced a Convention award when a ground for refusal under the Convention has been established.
The sole Dutch decision in which a foreign annulled award was enforced in France is the noted Yukos decision of the Amsterdam Court of Appeal. Yukos Capital s.a.r.l. v OAO Rosneft, Tijdschrift voor arbitrage 1011, p. 1534, Ybk Commc’l Arb., no. 31 (Apr. 28, 2009). However, there is dispute over whether enforcement in Yukos took place under the Convention or under some other means of award enforcement to which Art VII of the Convention permits access.
194.
See, e.g., Schreter v Gasmac Inc, (1992) OR (3d) 608 (Ct J Gen. Div). A fortiori, a foreign award may be recognized and enforced even though a set aside action is pending in the place of arbitration. See, e.g., Wires Jolley LLP v Wong, 2010 BCSC 391, 95 CPC (6th) 212; Powerex Corp. v Alcan Inc., 2004 BCSC 876, 132 ACWS (3d) 38.
195.
Awards annulled by a court of the arbitral seat were nevertheless enforced by U.S. courts in Chromalloy Aeroservices v Arab Republic of Egypt, 939 F.Supp. 907 (1996); Corporacion Mexicana de Mantenimiento Integral v Pemex-Exploracion y Produccion, 962 F.Supp. 2d 642 (S.D. N.Y. 2013). These are exceptional cases, however.
196.
See Hilmarton, Cass. Civ 1re, Mar. 23, 1994, Rev arb. 1994.327, JDI, 1994.701.
197.
Putrabali, Cass. Civ 1re, June 29, 2007, Rev arb, p. 507.
198.
See, e.g., OLG München, July 30, 2012, 34 Sch 18/10, SchiedsVZ 2012, 339, affirmed BGH, Apr. 23, 2013, III ZB 59/12, SchiedsVZ 2013, 229; OLG Dresden, Jan. 31, 2007, II Sch 18/05, SchiedsVZ 2007, 327, affirmed BGH, May 21, 2008, III ZB 14/07, SchiedsVZ 2008, 195.
199.
See, e.g., OLG München, Feb. 13, 1995, 17 U 6591/93, OLGR München, 1995, 57, para 17, reversed on other grounds, BGH, July 3, 1997, III ZR 75/95, NJW-RR 1997, 1289.
200.
See, for example, the national report for Norway.
201.
See in particular the United Kingdom report on the way in which such discretion is exercised.
202.
See, for example, the national report for Canada.
203.
See Sect. 3.2 of this report.
204.
See, for example, the national report for Austria.
205.
See, for example, the national reports for Austria, Australia, Brazil, Canada, India, and Sweden. Arbitration of consumer disputes is specifically authorized by the Czech Republic Act on Arbitration.
206.
See the national reports for Australia, Austria, Croatia, the Czech Republic, France, India, Italy, the Netherlands, Singapore, Sweden, and Switzerland.
207.
See the national reports for Austria, Brazil, China, Greece, Hungary, Israel, Italy, and Sweden.
208.
See the national reports for Croatia, Israel, Sweden, Turkey, and Venezuela.
209.
See the national reports for China, the Czech Republic, India, Israel, Italy, and Romania.
210.
See the national reports for Austria, Canada, China, France, Hungary, India, Israel, Italy, Paraguay, and Singapore.
211.
See the national reports for Austria, Croatia, Israel, and the Netherlands.
212.
See the national reports for Austria, Croatia, Germany, and the Netherlands.
213.
See the national reports for Austria, Israel, the Netherlands, Norway, and Singapore.
214.
For example, see the national report for Italy, according to which the following categories of claims once considered non-arbitrable are now considered arbitrable: antitrust, intellectual property, corporate governance, and labor law.
215.
This is expressly so provided in the Insurance Contracts Act 1984.
216.
See Metrocall Inc. v Electronic Tracking Systems Pty Ltd, (2000) 52 NSWLR 1 (jurisdiction of specialized Industrial Relations Commission to adjudicate cannot be derogated from by agreement to arbitrate). This may be regarded as an instance of “implied” non-arbitrability.
217.
Trade Practices Act 1974 (TPA).
218.
See, for Brazil, Arbitration Act, art 1.
219.
Among the numerous examples, see (a) Art 3 of the Croatian Law on Arbitration providing that parties may agree to arbitrate disputes regarding rights that they may freely dispose of; (b) Arts 1 and 3, section 1, of the Korean Arbitration Act, providing that any disputes in private law may be settled in arbitration; (c) Art 1020(3) of the Netherlands Arbitration Act, stating that “the arbitration agreement shall not serve to determine legal consequences of which the parties cannot freely dispose;” (d) Art 2 of the Arbitration Law of Peru stating “[a]ll disputes relating to matter that may be freely disposed of according to the law, as well as to matters permitted by the law, international treaties or agreements, can be referred to arbitration;” and (e) Art 1/IV of the Turkish Act on International Arbitration. In several jurisdictions, a dispute is deemed arbitrable as long as it may be the object of a compromise or settlement. See Uruguay (Civil Procedure Code, s 472, 476) and Venezuela (Commercial Arbitration Law, art 3, Statute on Private International Law, art 47, Code of Civil Procedure (art 608)).
220.
To the same effect, see the Portuguese Law on Voluntary Arbitration, arts 1(1) and (2):

(1) Any dispute involving economic interests may be referred by the parties to arbitration, by means of an arbitration agreement, provided that it is not exclusively submitted by a special law to the State courts or to mandatory arbitration.

(2) An arbitration agreement concerning disputes that do not involve economic interests is also valid provided that the parties are entitled to conclude a settlement on the right in dispute.

The Slovenian Arbitration Act, consciously following legislation in Germany, Switzerland and Austria, likewise makes the involvement of an economic interest in a dispute the hallmark of arbitrability.
221.
Technically, Art 177 of PILA governs international arbitral proceedings whose seat is in Switzerland, but the Swiss national reporter is confident that the same standards would be applied by analogy to the recognition and enforcement of foreign awards in Switzerland. Application of the broad standard set out in PILA Art 177 to recognition and enforcement of foreign awards may, according to the Swiss national report, explain why there are no reported Swiss cases in which recognition of enforcement of a foreign award has been denied on Art V(2)(a) grounds.
222.
Code of Civil Procedure, art 354.
223.
Comandate Marine Corp. v Pan Australia Shipping Pty Ltd, (2006) 157 FCR 45, [2006] FCAFC 192. The Singapore High Court has ruled that an award based on a finding of jurisdiction by alter ego is not subject to the non-arbitrability exception to enforcement because it did not implicate a “public interest,” which is the hallmark of issues considered non-arbitrable under Singapore law. Aloe Vera of America, Inc. v Asianic Food Pte Ltd, [2006] SGHC 78, paras. 71–72.
224.
However, the notion of ordre public (public policy) is narrowly construed in this context. The fact that a matter is governed by public law rather than private law does not in itself bring the ordre public exception into play. A good example is competition law, a field in which claims are freely arbitrable.
225.
Jurisdictions reportedly taking this position include Australia, Canada, Greece, India, Korea, Romania, Singapore, Switzerland, Turkey, and Venezuela.
226.
According to the United Kingdom report, “[g]enerally speaking, when the subject matter of the dispute is capable of being settled by arbitration under the substantive law of the dispute and the law of the arbitration, English courts tend to consider whether to exercise their discretion to deny enforcement simply on the grounds that the matter is not arbitrable under English law.” The U.K. report does not, however, cite any decisions to this effect.
227.
The Swedish national report cites a case for this very proposition. OAO Arkhangelskoe Geologodobychnoe Predpriyatie v Archangle Diamond Corp., Case T 2277-04 (Nov 15, 2005). The national reporter describes the case as holding that “the fact that an issue is non-arbitrable under a foreign legal system does not constitute grounds for refusal …, even where the foreign legal system applies to the arbitration agreement, as well as the issue, which the award concerns.” Swiss law is apparently to the same effect.
228.
Arbitration Law, art 16.4 (the “maximum efficacy” principle) essentially takes the position that the arbitrability of a dispute should be determined by reference to the law that is most favorable to arbitration.
229.
See the national reports for Norway and Japan. According to the Norwegian national reporter, “the rule of arbitrability should not be applied in abstract, but consideration should be given to the result of enforcing that particular award in the specific case – along the same lines as are applicable for the public policy exception.” According to the Japanese national report, a sizeable number of scholars “are of the opinion that the possibility of free disposition should be examined pursuant to the law applicable to the subject matter of the relationship.”
230.
See, e.g., the Irish cases of Brostrom Tankers AB v Factorias Vulcano SA, [2004], IEHC 198, [2004] 2 I.R. 191; Danish Polish Telecommunication Group I/S v Telekomunikacja Polska S.A., [2011] IEHC 369.
231.
The national reporter for Norway, for example, reports no case law whatsoever on the subject.
232.
Countries whose reports emphasize the public policy defense include Canada, China, France, Germany, India, Japan, Malaysia, Russia, Switzerland, and the United Kingdom.
233.
See, for example, the national reports for Germany, Netherlands, Slovenia, and Sweden.
234.
See, for example, the Hong Kong report.
235.
The Chinese, Croatian, and German national reports are especially emphatic on this point. See also the national report for the Netherlands. In the one Chinese decision denying recognition and enforcement on public policy grounds, the court ruled that to enforce an award that contradicted an earlier Chinese court decision would, in the national reporter’s words, “amount to a violation of public interests and … violate [the] judicial sovereignty of China and [the] jurisdiction of [the] Chinese court.” Hemofarm DD v Yongning Pharmaceutical Co., Ltd., available at http://www.fsou.com/html/text/chl/1327/132739.html.
But see the Turkish national report suggesting that violations of mandatory rules necessarily constitute offenses to public policy. Decision E 997/9703 and K 998/978, 13th Civil Chamber of the Court of Cassation (Feb. 5, 1998).
236.
See the national reports for Canada, Germany, Greece, Hong Kong, Japan, Norway, Peru, Singapore, Slovenia, and Switzerland. Justice Foster of Australia, citing case law not only of that country, but also of Hong Kong and the U.S., stated:

The scope of the public policy ground of refusal is that the public policy to be applied is that of the jurisdiction in which enforcement is sought, but it is only those aspects of public policy that go to the fundamental, core questions of morality and justice in that jurisdiction which enliven this particular statutory exception to enforcement. The public policy ground does not reserve to the enforcement court a broad discretion and should not be seen as a catch-all defence of last resort. It should not be used to give effect to parochial and idiosyncratic tendencies of the courts of the enforcement state. (Traxys Europe SA v, Balaji Coke Industry Ltd. (no. 2), (2012), 201 FCR 535)

The Korean courts have been asked on several occasions to deny recognition or enforcement of foreign awards on public policy grounds, but have thus far refused to do so, maintaining the view that the ground is to be construed narrowly. A good example is the decision of April 12, 1984, 83 Kahap 7051 (Seoul Civil Local Court, 7th dep’t), enforcing an award mandating performance under a contract even though under Korean law performance would have been excused as due to a natural disaster. Similarly, a court in Macau enforced a contract for the provision of legal services on a contingent fee basis even though such contracts are prohibited under the law of Macau. Case 163/2008, Court of Second Instance (Nov. 12, 2009).
237.
This is the experience in the United States, where courts emphasize that enforcement of an award will not be deemed contrary to public policy unless it would offend “the most basic notions of morality and justice” (see Fotochrome, Inc. v Copal Co., 517 F.2d 512, 516 (2d Cir. 1975)) or “[be] repugnant to fundamental notions of what is decent and just” (see Republic of Argentina v BG Group PLC, 764 F. Supp. 2d 21, 39 (D.C. Cir. 2011), quoting Ackerman v Levine, 788 F.2d 830, 841 (2d Cir. 1986)).
238.
For example, in the case of Resort Condominiums v Bolwell, (1993) 118 ALR 655, the Queensland Supreme Court found that enforcement of an award would violate public policy for three distinct reasons: (a) the orders issued by the arbitrators were too vague and far-reaching to permit enforcement, (b) the orders were not of the sort that a court in that jurisdiction would make, and (c) the orders were duplicative of those already issued by a U.S. court in respect of the same subject matter. The national reporters suggest that these public policy rationales, particularly the second, should “raise eyebrows.” In another Australian case, the court ruled that the illegality of a contract containing an arbitration clause could be the basis of a public policy objection to recognition or enforcement, even though the question of illegality had been raised before and decided by the arbitrator. Corvetina Technology Ltd. v Clough Engineering Ltd., [2004) NSWSC 700.
The Brazilian national reporter cites with disapproval a case in which the public policy exception was applied on the ground that the foreign award did not comply with certain provisions of the Brazilian Arbitration Act applicable to arbitrations conducted in Brazil. Those provisions require an arbitration agreement to be in writing and duly signed by the parties. The reporter termed such a judgment as “simplistic.”
The loose construction of “violation of public policy” by Indian courts has especially come in for criticism. While in the leading case of Renusagar Power Ltd. v General Electric, 1994 Supp. (1) SCC 644 (Supreme Court), the Supreme Court ruled that enforcement of an award would be contrary to public policy if contrary to either fundamental policy of Indian law, the interests of India or justice and morality, it subsequently broadened the notion. In the case of ONGC v SAW Pipes Ltd., 2003, 5 SCC 705, 709, the Court added a fourth ground, namely “patent illegality.” Subsequent case law understands that term to denote an error of law apparent on the face of the record. Sayanarayan Laxminarayan Hegde v Mallikarjun Bhavanappa Tirumale, 1960, 1 SCR 890.
Although Malaysian courts claim to construe the public policy exception narrowly, they have rendered decisions that call that claim into question. In Sami Mousawi v Kerajaan Negeri Sarawak, [2004] 2 MLJ 414, a court refused to enforce an award that in turn enforced a contract for consultancy services where the consultant failed to meet the Malaysian standards for certification of architects, engineers and surveyors. In Harris Adacom Corp. v Perkom Sdn Bhd, [1994] 3 MLJ 504, the court ruled that it would be contrary to public policy to enforce an award in favor of an Israeli company, due to Malaysia’s embargo on trade with Israel.
239.
Russia offers a good example. According to the national reporters, Russian courts tend to give the public policy defense very wide application. Especially problematic of course is the use of violation of public policy as a basis, not for denying recognition or enforcement of a foreign award, but for purporting to annul a foreign award (which of course is a prerogative reserved to courts of the arbitral seat). See the notorious Indonesian court judgment in Pertamina v Karaha Bodas Co., decision no. 86/PDT.G/2002/PN.JKT.PST (Aug. 19, 2002).
240.
Odgen Entertainment Services, Inc., commercial court of appeals of Buenos Aires, chamber E, La Ley, volume 2005-B, p. 21 (Sept. 20, 2004).
241.
Subway Franchise Systems of Canada Ltd. v Laitch, [2011] SKQB 249, 206 ACWS (3d) 655. See also the Italian judgment in Filippello v El Sheraton Golf Hotel, Cass (Mar. 10, 1999), denying enforcement as against public policy of a foreign award contrary to and involving the same parties and object court as a decision that had already become res judicata.
242.
Smart Systems Technologies Inc. v Domotique Secant Inc., QCCA 444, 168 ACWS (3d) 696.
243.
Tbilisi Court of Appeal, Decision no. 2B/3048-10 (Nov 3, 2010).
244.
Nisan Albert Gad v David Simon Tov, case 2103/03 (Jerusalem District Court).
Whether enforcement of a foreign award granting punitive damages would violate public policy is a question that continues to arise and that has not lent itself to hard-and-fast rules. See, for example, the national reports for Italy and Japan. Another commonly raised question is whether awards may be denied recognition or enforcement due to their application of a rate of interest substantially in excess of the rate of interest prevailing under forum law. Invocation of public policy in this context is usually unsuccessful. See, for example, the decision of the Lisbon Court of Appeal of December 17, 1998, published in Colectânea de Jurisprudência, tome V, pp. 125 et seq. (1998).
245.
Decision E 2064; K 1513, 15th Civil Chamber of the Court of Cassation (Mar. 10, 1994); decision E 1994/2876; K 1995/164, 15th Civil Chamber of the Court of Cassation, (Jan. 19, 1995).
246.
In a controversial decision of 2006, however, the Swiss Federal Tribunal held that competition law rules do not form part of international public policy, basically for lack of universality, see DFT 132 III 389, reason 3.
247.
See Section 611 (2) (5) and (2) (7) of the Austrian Civil Procedure Code. The Austrian statute distinguishes between breaches of procedural and substantive public policy. Examples of the former would be lack of impartiality or independence of the tribunal, participation of a party not capable of being a party to legal proceedings, and res judicata. Examples of the latter would be violations of fundamental civil rights under Austrian law and substantial violations of European law, notably EU competition law.
Section 8(7A) of Australia’s International Arbitration Act provides that “[t]o avoid doubt …, enforcement of a foreign award would be contrary to public policy if: (a) the making of the award was induced or affected by fraud or corruption; or (b) a breach of the rules of natural justice occurred in connection with the making of the award.”
248.
The distinction is nicely articulated in the Dutch national report.
249.
These countries include Austria, Brazil, China, the Czech Republic, Hungary, Italy, Russia, Slovenia, Taiwan, the United Kingdom, and the United States.
250.
These countries include Australia, Canada (at least in Quebec), Croatia, France, Germany, Italy, Portugal, Slovenia, Turkey, Uruguay, and Venezuela. In Portugal, arbitration legislation expressly provides that the recognition and enforcement of foreign awards is subject to international rather than domestic public policy. According to the enactment (Law on Voluntary Arbitration, art 56(1)(b)(ii)), a foreign arbitral award may be denied recognition and enforcement if that “would lead to a result clearly incompatible with the international public policy of the Portuguese State” (emphasis added).
251.
The effect of postulating an international as distinct from a domestic public policy is to render it more, rather than less, difficult to defeat recognition or enforcement on public policy grounds. In France, it is further emphasized that a violation of an international public policy norm arises only when the violation, under the circumstances, may be described as “effective et concrète,” “flagrante,” or “manifeste.” For French rulings to this effect, see Société SNF v Société Cytec, Cass civ 1re, Rev arb. 2008.473 (June 4, 2008); Thales, RTD com.2005.263, Court of Appeal Paris (Nov. 18, 2004).
252.
As the Swiss national report points out, “[i]n a constant line of decisions, the Swiss Federal Tribunal exclusively refers to an ‘international’ or ‘transnational’ public policy.” As the report explains, “[t]his means that not all fundamental principles of the Swiss legal system belong to international public policy, but only ‘universal’ principles, i.e., such principles, which – under Swiss understanding of law and sense of justice – should be considered as fundamental by all countries in the world.” The report cites as examples of Swiss decisions to this effect DFT 132 III 389, reason 2; DFT 128 III 191, reason 4a; DFT 120 II 155, reason 6a.
253.
According to the national reports for the Netherlands and Germany, the same may be said for the Dutch and German courts, respectively.
254.
A good example is Romania, where the distinction—consciously based on the French model—has recently come to be widely adopted within arbitration circles.
National reports for member states of the EU emphasize the national courts’ inclusion within the notion of public policy (whether national or international) of “European Union public policy.” See, in particular, the national reports for Croatia, Slovenia, and Sweden.
255.
See, for example, the national reports for India and Vietnam.
256.
In Singapore, the Court of Appeal initially adopted the distinction, stating that “public policy in the conflict of laws operates with less vigour than public policy in the domestic law.” Liao Eng Kiat v Burswood Nominees Ltd., [2004] SGCA 45, 40. However, the court later ruled that the distinction has no application in cases governed by the International Arbitration Act (IAI), based on the UNCITRAL Model Law, because all awards subject to the IAI, as opposed to the Arbitration Act (AA) which applies exclusively to domestic arbitrations and awards, possess an “international focus” anyway. Soh Beng Tee & Co. Pte Ltd v Fairmount Development Pte Ltd., [2007] SGCA 28, para 61.
257.
Art IV provides:

(1) To obtain the recognition and enforcement mentioned in the preceding Art, the party applying for recognition and enforcement shall, at the time of the application, supply:

a. The duly authenticated original award or a duly certified copy thereof;

b. The original agreement referred to in Art II or a duly certified copy thereof.

(2) If the said award or agreement is not made in an official language of the country in which the award is relied upon, the party applying for recognition and enforcement of the award shall produce a translation of these documents into such language. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent.
258.
Among these countries are Austria, Argentina, Brazil, China, the Czech Republic, France, Germany, Hungary, Italy, Japan, Norway, Paraguay, Peru, Portugal, Switzerland, Turkey, and Venezuela.
259.
Thus, the competent court in Italy is the court of appeal in the place where the award debtor has its seat or domicile. Absent seat or domicile in Italy, jurisdiction vests in the Court of Appeal of Rome. Similarly, in Greece, neither residence, nor domicile nor location of assets is necessary to establish jurisdiction. But in the absence of them all, jurisdiction is vested in the Court of First Instance of Athens. Code of Civil Procedure, art 905.
The Indonesian national report identifies no particular requirements that must be met to establish personal jurisdiction to entertain an award enforcement action. But competence over such actions is in any event reserved to the Central Jakarta District Court. New Arbitration Law, art 65.
260.
The national report cites a decision of the Seoul Central District Court finding the necessary substantial connection with Korea. Decision 2009 Kahap 136849 (Sept. 7, 2010). But the case was an easy one since, according to the national report, not only was the petitioner a Korean company and the respondent a foreign company that was the petitioner’s majority shareholder, but “[g]iven that it was not difficult for the respondent to respond in the proceedings in Korea, that the execution of the arbitral award needed to be done in Korea, and that the governing law was Korean law,” the court was able to conclude “that enforcement of the foreign award in Korea conformed to both parties” expectations, contributed to the fairness and the convenience of the enforcement, and thus established Korea’s substantive relation to the parties as well as the subject in dispute.”
261.
DCBA, art 271(1)(6).
262.
The national report for Macau contains a suggestion that personal jurisdiction over an award debtor may be exercised only if the underlying obligation is to be performed in Macau. This seems improbable. The New York Convention offers no basis for confining a State’s obligation to enforce foreign arbitral awards to awards based on obligations to be performed on the territory where enforcement is sought.
263.
See First Investment Corp. of the Marshall Islands v Fujian Mawei Shipbuilding Ltd., 703 F.3d 742, 746 (5th Cir. 2013).
264.
See, e.g., Telecordia Tech Inc. v Telkom SA Ltd., 458 F.3d 172, 179 (3d Cir. 2006).
265.
Among these countries are Australia, Canada, Croatia, India, Indonesia, Israel, Peru, Slovenia, and Uruguay. This also appears to be the case in the Netherlands. However, Israel requires that the defendant be served with the claim in Israel or, subject to observance of certain preconditions, outside of Israel.
266.
U.K. Limitation Act, s 7. In Agromet Motorimport Ltd. (Poland) v Maulden Engineering Co., [1985] 1 W.L.R. 762, 763, the court applied the term “the date on which the cause of action accrued” as follows: “[A]n action to enforce an arbitrator’s award was an independent cause of action arising from the breach of an implied term in the arbitration agreement that the award would be honoured and not from the breach of the contract which had been the subject of the arbitration. [T]he six-year limitation period imposed by section 7 of the Limitation Act 1980 … therefore began to run from the date of the failure to honour the award.” What is not clear, however, is how the date of failure to honor the award is determined, unless it is assumed that the “failure” begins as of the date the award is issued.
267.
This is apparently the case for Brazil, Croatia, Germany, Greece, Israel, Korea, Paraguay, Singapore, Switzerland, and Vietnam.
268.
See, for example, Greece.
269.
See, for example, Argentina, Australia, Austria, China, France, Hungary, India, Macau, and Malaysia. In India, reference is made to a general Schedule of Limitation Act (art 137), providing a limitations period of three years from the date on which the right accrues, i.e. the date of the final award. See Noy Vallesina Engineering SpA Corp. v Jindal Drugs Co., [2006] (3) Arb. L.R. 510 (Bom).
270.
Portugal has no specific limitations period for award enforcement actions, so that the general limitations period of twenty years set out in the Portuguese Civil Code is applicable, provided however the rights that are the subject of the award are governed by Portuguese substantive law.
271.
The Venezuelan report cites this as a plausible approach.
272.
By way of example, in the U.K., Rule 62.18 of the Civil Procedure Rules requires the award creditor to apply for permission under Section 100 of the 1996 Arbitration Act to enforce the award. The application may be made without notice, but must be supported with certain documentation (mirroring what Art IV of the Convention itself requires) and must state either (i) that the award has not been complied with or (ii) the extent to which it has not been complied with. The U.K. is not alone in requiring the award creditor to make a formal statement to the effect that an award has not been complied with, or complied with in full. See, in Singapore, Rules of Court, O. 69A r. 6 (1A).
273.
See, for example, the national report for Vietnam.
274.
In Slovenia, jurisdiction is exclusively vested in the District Court of Ljubljana.
275.
The Slovenian Arbitration Act provides for the possibility of one appeal only, which goes to the Supreme Court.
276.
See, for example the national reports for the Czech Republic and France.
277.
See, for example the national reports for France and Italy. Obviously national rules may not, consistent with the Convention, apply its rules of locus standi to bar the award creditor itself from pursuing an action to enforce the award.
278.
See, for example the national report for the Czech Republic.
279.
According to the Hong Kong report, “[i]f an award is made against a State and it is brought for enforcement in Hong Kong then following the principle of absolute Sovereign immunity which is now in practice in Hong Kong after 1997, the court of Hong Kong shall refuse recognition and enforcement of a Convention award.”
280.
The courts of Canada have not yet taken a position on the availability of forum non conveniens in award enforcement actions. For a controversial Israeli decision, denying enforcement on forum non conveniens grounds, see Zvi Vidavski c. Chaya Simon, Application Permission to Appeal 2017/94 (June 16, 1994). A forum non conveniens motion in another enforcement case was denied due to the significance of the case’s links with Israel. Avraham Greenbaum v Yehoshua Greenbaum, Family Case (Jerusalem) 540/01 (Oct. 17, 2001).
281.
See, e.g., Sonera Holding B.V v Cukurova Holding A.S., 895 F. Supp. 2d 513, 523 (S.D. N.Y. 2013).
282.
Leading U.S. decisions granting a forum non conveniens motion in an award enforcement action include Monagesque de Reassurances S.A.M. v NAK Naftogaz of Ukraine, 311 F.3d 488 (2d Cir. 2002), and Figuereido v Republic of Peru, 665 F.3d 384 (2d Cir. 2011).
283.
See, e.g., Sonera Holding B.V v Cukurova Holding A.S., 895 F. Supp. 2d 513, 523 (S.D. N.Y. 2013).
284.
See notably the national reports for Austria, Canada, China, Croatia, Germany, Greece, Hong Kong, Hungary, India, Ireland, Israel, Italy, Korea, the Netherlands, Norway, Peru, Slovenia, Sweden, Switzerland, the United Kingdom, and Uruguay. The Australian report states flatly that the Convention “is not subject to criticism in Australia,” while the Turkish report calls the New York Convention “the most successful convention (a Magna Carta) in private international law” and describes its influence on international commercial arbitration as “phenomenal.”
285.
See, for example, Croatia and Paraguay. Reporters for a few countries—Macau and Venezuela, for example—expressly refrain from advancing proposals for reform, due to the relative scarcity of Convention cases in their courts and the resulting lack of experience with the Convention. In fact there is no reported judicial decision in Macau involving the New York Convention, and only the rare judicial decision in Venezuela.
For different reasons, the efficacy of the Convention is not as salient a matter in France and the United Kingdom as one might suppose, considering that both are major players in international commercial arbitration. In France, as noted (see notes 47, 48 and accompanying text), award creditors rarely invoke the New York Convention, due to the greater appeal of France’s own even more arbitration-friendly regime for the enforcement of foreign awards. As a result, there is relatively little critical discussion of the Convention in France. The U.K. report observes that the volume of Convention case law in the U.K. is less than one might have expected. Due to the great popularity of London as an arbitral seat, more attention is given to the efficacy of the legal regime for the conduct of arbitration in the U.K. than to the recognition and enforcement of foreign arbitral awards in the U.K.
286.
See, for example, the national reports for Canada, Germany, and Turkey.
287.
These countries include Austria, Canada, China, Croatia, Germany, and Hungary.
288.
See, for example, the national report for Australia.
289.
The Israeli report echoes this sentiment. In Turkey, regular seminars, conferences and colloquia (organized mainly by the Istanbul Chamber of Commerce and the ICC Turkish National Committee) have reportedly succeeded somewhat in educating the judiciary and the legal profession more generally on international arbitration, though more needs to be done.
290.
See, in particular, the national reports for Brazil, Croatia, Georgia (applying Georgian Private International Law rather than the Convention, even though the latter strictly speaking applies only to foreign court judgments), Israel and Turkey. According to the Croatian national report, for example, courts have repeatedly applied national law on the enforcement of foreign arbitral awards rather than the Convention, even though the latter is applicable. Fortunately, doing so has not been outcome-determinative.
291.
See, for example, the national reports for Argentina, Australia, Brazil, India, Paraguay, Russia, and Venezuela. The Paraguayan report laments the delays in the disposition of enforcement actions in national court, but the problem of delay is a systemic one and by no means peculiar to enforcement actions.
292.
Among the countries whose national reports raise criticisms are China, Greece, Korea, and the Netherlands.
293.
The Israeli reporter in particular cites the need for a clearer definition of arbitration agreements, including greater clarity as to formal requirements applicable to such agreements.
294.
See note 21 and accompanying text.
295.
Ambiguity is not the only difficulty associated with the definition (or failure of definition) of the term “arbitration agreement.” Several national reports, such as the German, Russian, Swiss, and Turkish point to what they describe as a pressing need for modernization of the notion of “arbitration agreement” so as to take due account of technological change. The restrictiveness of the Convention’s form requirements is reportedly causing parties to invoke the more liberal means of enforcing foreign awards under national German law instead.
The Hungarian report is the only one to call specifically for a better definition of terms such as arbitration agreement, arbitral award, and public policy.
296.
The Brazilian report singles out the status of interim measures as especially unclear, and urges that consideration be given to addressing the matter in the Convention text itself. Relatedly, according to the Greek national report, “[t]here is no doubt that the authority of an arbitral tribunal to grant protective relief, as well as the enforceability of the relevant foreign award, cause uncertainty in practice. An express provision needs to be added.” See also the national reports for Croatia, Greece, and Malaysia. The Swiss report urges not only clarification of the status of interim measures under the Convention, but an affirmation that interim arbitral measures do constitute awards.
297.
As noted (see Sect. 3.2.4 of this report), the UNCITRAL Model Law makes interim measures legally enforceable, without however constituting them awards as such. The Hong Kong would have the Convention specifically declare interim arbitral measures to be judicially enforceable (whether as awards or otherwise).
298.
See, for example, Austria (the discussion in Austria concerns form requirements under Art II), Germany, Greece, the Netherlands, and Norway.
299.
The Israeli national report identifies both substantive and procedural difficulties in the national courts’ implementation of the Convention.
300.
According to the German national report, “[t]he possibility of applying the Convention to any arbitration agreement entailing some kind of international element, regardless of the place of arbitration, has not been pursued by German courts. In that respect, commentators have considered it desirable to clearly define the Convention’s scope of application with regard to agreements to arbitrate.”
301.
Figueiredo v Republic of Peru, 665 F.3d 384 (2d Cir. 2011).
302.
See, for example, the German national report.
303.
Sovereign immunity has evidently been an obstacle to the recognition and enforcement of awards against States and State instrumentalities in Hong Kong. See the cases of FG Hemisphere v Democratic Republic of Congo, [2009] 43 CACV; and Intraline v The Incorporated Owners of the Vessel Hua Tian Long, [2010] HKCFI 361 (Apr. 23, 2010).
304.
A good example is the issue of statutes of limitation. By the criteria stated above, this issue is a good candidate for reform at the international level, and in fact the Greek report specifically advocates that the Convention itself fixe a limitations period, thereby producing greater uniformity in access to the Convention for recognition and enforcement purposes. The Canadian report makes a similar suggestion. Interestingly, the Israeli national report calls for establishment of a limitations period, but would have that accomplished at the national level.
305.
The Chinese report specifically urges that the word “may” in Art V be replaced with the word “shall.”
306.
See notes 99, 100 and accompanying text.
307.
The Dutch report, for example, seeks clarification of the courts’ authority under the Convention to recognize and enforce awards despite their having been annulled at the arbitral seat. The Greek national report goes further. It would have the Convention modified to expressly make denial of recognition or enforcement mandatory if a defense is established.
308.
The Chinese reporter suggests that uniform standards be set at the international level for the setting aside of awards in courts of the arbitral seat. In all fairness, however, the drafters of the Convention consciously limited the scope of the Convention to the recognition and enforcement standards and not set aside standards. To extend the Convention to establish uniform annulment standards would be to change the scope of the Convention’s mission. What the Chinese reporter can more reasonably hope to introduce into the Convention, in place of harmonized annulment standards, is a common standard for enforcing foreign awards notwithstanding their annulment.
309.
The Korean national reporter claims that the courts of Korea have in fact interpreted the public policy exception suitably narrowly, but complains that courts of certain other countries exhibit a tendency to treat the exception as a “catch-all, kitchen sink phrase,” essentially misusing it to limit unduly the recognition and enforcement of foreign arbitral awards. Such countries may include Turkey. The Turkish national report is critical of the courts’ excessive use of the public policy defense. “The courts are usually inclined to deny enforcement relying frequently on the ground of ‘public policy’.”
310.
See, for example, the national report for Malaysia.
311.
See, notably, the national reports for Korea and Russia.
312.
The Swiss national report also urges that Art V(1)(c) be redrafted to distinguish clearly between awards rendered outside the jurisdiction of the arbitral tribunal and awards exceeding the parties’ claims.
313.
See, for example, the national report for China.
314.
See the national reports for Argentina, Australia, and, most emphatically, Greece. According to the Malaysian report, disparities among States in application of the Convention would be mitigated by better definition of terms and concepts in the Convention.
315.
The Swiss national report makes a special plea for clarification of this issue.
316.
See, for example, the national report for Israel, which actually argues that less deference should be shown to such prior judicial rulings.
317.
The German report also finds the Convention unilluminating on the question of the weight if any to be given to arbitral findings in determining whether a defense to recognition or enforcement has been established.
318.
See, for example, the Greek national report.
319.
These jurisdictions include Argentina, Austria, Canada, the Czech Republic, Germany, Hong Kong, and India. The Irish and U.K. national reports state flatly that there is no need for Convention reform as such. The Swedish national report puts the matter this way: “Given the difficulties in successfully redrafting the Convention and obtaining new ratifications, it may be preferable to work towards more harmonized interpretations and applications of the existing Convention than to attempt reforms.”

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Columbia University School of Law, 435 West 116th Street, New York, NY, 10027, USA
George A. Bermann
International Academy of Comparative Law, Paris, France
George A. Bermann

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Department of Civil Law, University of Vienna, Vienna, Wien, Austria
Martin Schauer
Department of European, International and Comparative Law, University of Vienna, Vienna, Wien, Austria
Bea Verschraegen

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Bermann, G.A. (2017). Interpretation and Application of the New York Convention by National Courts. In: Schauer, M., Verschraegen, B. (eds) General Reports of the XIXth Congress of the International Academy of Comparative Law Rapports Généraux du XIXème Congrès de l'Académie Internationale de Droit Comparé. Ius Comparatum - Global Studies in Comparative Law(), vol 24. Springer, Dordrecht. https://doi.org/10.1007/978-94-024-1066-2_3

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