Annulment versus Enforcement of International Arbitral Awards 47

the enforcement of foreign arbitral awards a distinction

Annulment versus
Enforcement of
International Arbitral
Awards: Does the
New York Convention
permit Issue
Estoppel?
* enforcement of an award. By analysing some recent
Harisankar K. S.
Arbitration awards; Enforcement; Foreign awards;
Issue estoppel; Jurisdiction; New York Convention
awards; Setting aside
Abstract
This article juxtaposes the role of primary jurisdiction
and secondary jurisdiction in setting aside and refusal
of enforcement of an international commercial arbitration
award respectively. By examining some national courts’
decisions that deny the international legal rights (of
refusal of enforcement of an award) of an award-debtor
provided under the New York Convention, it argues
against the application of issue estoppel by a foreign
enforcement court.
1. Introduction
The credibility of international arbitration as a preferred
method of dispute resolution in commercial matters
depends mainly on the cross border enforceability of
arbitral awards. As opposed to court judgments these
awards are readily enforceable in most parts of the globe.
All credit must go to the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards (New York
Convention) that created a smooth and efficient regime
for recognising and enforcing arbitral awards
internationally.1 Among other things, this international
legal instrument sets out different grounds on which a
national court may refuse the enforcement of an arbitral
award. Despite the copiousness of academic literature on
that is not always fully recognised is the difference
between refusal of enforcement and annulment of arbitral
awards.2 Concisely, the supervisory court at the seat of
arbitration has the power to annul an award made within
its territory, while the enforcement court abroad has power
only to consider granting or refusing the recognition and
enforcement of an award in its territory.3 Frequently, in
international arbitration jurisprudence, this distinction
has been generally referred to as a segregation between
“Primary Jurisdiction” and “Secondary Jurisdiction”.4
Against this backdrop, the paper attempts to compare
and contrast the role of supervisory court and a foreign
enforcement court in setting aside and refusing the
national courts’ decisions that deny international legal
rights (of refusal of recognition and enforcement) of an
award debtor provided under the New York Convention,
it argues against the application of the issue estoppel by
a (foreign) enforcement court. The paper is composed of
five parts. After this introduction, the second part will
analyse the essential differences between post award
remedies, namely, annulment and enforcement as
provided under the UNCITRAL Model Law on
International Commercial Arbitration (Model Law)5 and
New York Convention. Next, the concept of Issue
Estoppel under English common law as well as
international law will be considered. This part will reflect
on various circumstances that call for the application of
issue estoppel by a New York Convention court, and
makes a claim against the blind application of this
doctrine at award enforcement stage. Fourthly, it considers
some recent judgments from common law jurisdictions
regarding the application of issue estoppel and critiques
the judicial approach of denying the legal rights of an
award debtor. In conclusion, the paper comments on the
legal implausibility of the use of issue estoppel under
New York Convention.
2. Annulment and enforcement
A global survey of international arbitration practice
suggests that award debtors voluntarily comply with
awards, without the intervention of a national court.6
However in theory, an award debtor would try to get the
award annulled at the place of arbitration, and almost at
the same time, it is possible that an award creditor will
try to get the award enforced in as many jurisdictions in

*
PhD Candidate, Faculty of Law, National University of Singapore. Email: harisankar@u.nus.edu.
1
Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, June 10, 1958. See United Nations, Treaty Series, Vol.330, p.3. At present, there
are 155 contracting states acceded to the convention. See, https://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-1&chapter=22&lang=en [Accessed
May 13, 2015].
2
The words “Annulment” and “Setting aside” are used synonymously in the paper. See, Albert Jan van den Berg, “Enforcement of arbitral awards annulled in Russia”
(2010) 27(2) Journal of International Arbitration 179.
3
This is an accepted standard in modern international arbitration law and practice. However, there were instances where a court other than one at the seat of arbitration has
annulled an award; for, e.g. see Venture Global Engineering v Satyam Computer Services Ltd (2008) 4 SCC 190 (India).
4
See W. Michael Reisman, Systems of Control in International Adjudication & Arbitration—Breakdown and Repair (Duke University Press, 1992). Also, see Karaha Bodos
Co v Perusahaan Pertambangan Minyak dan Gas Bumi Negara US Court of Appeals, 5th Circuit (2004).
5
United Nations Commission on International Trade Law, Model Law on International Commercial Arbitration (United Nations Publication, Sales No: E.08 V.04, ISBN
978-92-1-133773-0), http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/1985Model_arbitration.html [Accessed May 13, 2015].
6
See, Queen Mary University of London School of International Arbitration and Price Waterhouse Cooper, Report on International Arbitration: Corporate Attitudes and
Practices (2008), http://www.pwc.co.uk/assets/pdf/pwc-international-arbitration-2008.pdf [Accessed May 13, 2015]. (Reports from in-house counsels indicate that more
than 90 per cent of the awards were honoured by the unsuccessful party), and it is believed that the trend is continuing today as well.

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48 International Arbitration Law Review

which the award-debtor has assets. Every national law of While a supervisory court must ensure that the decision
arbitration allows an unsuccessful party to challenge the rendered by a private arbitral tribunal is in accordance
award before a court at the country of origin. The Model with the state’s fundamental notions of justice; an
Law, which is widely adopted by countries,7 sets forth enforcement court must carry out a balancing exercise
various grounds for setting aside an award in the country between finality and justice. Although there exists a
of origin.8 On the other hand, the New York Convention parallelism between the grounds for annulment and those
provides the criteria for enforcing an award rendered in of refusal of enforcement, it is important to consider the
a contracting State other than the State where the effect of a court decision on an international award.16
enforcement is sought.9
2.2 Setting aside as a ground for refusal of
2.1. Parallelism of Model Law with New enforcement
York Convention
There has been a great debate as to the contextual
Model Law provides only one type of recourse against meaning of the term “may” in the text of New York
an award, to the exclusion of any other mode of appeal Convention art.V, the focal point of the controversy being
procedure prescribed under the municipal legal system art.V(i)(e).17 According to Albert Jan van den Berg, the
of the country where the arbitration is placed. setting aside of an award in the country of origin has a
Accordingly, an application for setting aside can be made universal effect, whereas the refusal of enforcement has
before a national court at the place of arbitration.10 no effect in other jurisdictions18:
Nevertheless, an explanatory note by the United Nations
“refusal of enforcement has only a territorial effect
Commission on International Trade Law, on the Model
(i.e., is mostly limited to the country in which the
Law records that11: “recourse means actively attacking
enforcement order is refused). A court in another
the award; a party is, of course, not precluded from
country can arrive at an opposite decision by
seeking court control by way of defence in enforcement
granting enforcement of the same decision in that
proceedings”. This means that, an unsuccessful party to
country. In contrast, the setting aside of an arbitral
an arbitration has an option to resist the enforcement of
award has an erga omnes effect. Once the award has
the award irrespective of the country in which it was
been annulled in the country where the award was
made, pursuant to art.36 of the Model Law. An exclusive
made, it is no longer eligible for recognition and
list of grounds for setting aside an award provided under
enforcement in the contracting states. Setting aside
art.34 is essentially same as the one under art.36(1), which
thus provides a legal certainty.”
is adopted from art.V of the New York Convention.12
Reading together art.34(2) and 36(1) of the Model Law However, this view (especially the later part) has not been
causes the possibility of a double review of an award in wholly appreciated by many other scholars in the field.
the country of origin.13 There are basically two schools of thought on this
Despite the use of identical grounds for setting aside contentious issue. First, the territorial approach, according
and refusal of enforcement of awards in national to which the courts would deny the enforcement of an
arbitration laws, the scope of review at both these levels award if it has been annulled at the country of origin.
call for different standards. As I have opined elsewhere, Common law courts, especially courts in England acts in
“enforcement is a stage that comes only after an award accordance with this view point. The latest decision in a
has attained its finality; however, annulment deals with line of cases is Malicorp Ltd v Egypt,19 where the High
a stage in arbitration where the award has yet to become Court rejected the option of exercising the discretion
final.”14 Courts in Model Law jurisdictions have generally under s.103(2)(f) (corresponding provision of art.v(i)(e))
accepted this view, in that the scope of review is much of the Arbitration Act and denied enforcement of an award
wider when the validity of award has been challenged; annulled in Cairo (seat of arbitration). However, Malicorp
whereas it could be limited at the enforcement stage.15
7
National legislations based on the Model Law has been adopted in 67 states in a total of 97 jurisdictions; status is available at: http://www.uncitral.org/uncitral/en/uncitral
_texts/arbitration/1985Model_arbitration_status.html [Accessed May 13, 2015].
8
Recourse against an arbitral award may be made by an application for setting aside. See art.34(1) of the Model Law. Article 34(2) provides various grounds for this recourse.
9
It is important to mention that the convention does not apply to a court at the country of origin, unless the award is considered as a “non-domestic” one. See art.1(1) of the
New York Convention.
10
See fn.8 above.
11
See fn.5, see explanatory note, p.23.
12
Model Law art.36(1)(a)(v), [the corresponding provision of New York Convention art.V(1)(e)] contains an additional provision, which essentially mentions the setting
aside of an award already at the place of arbitration as a ground for refusal of enforcement. Needless to say, this is an obvious omission from art.34(2) that prescribes the
grounds for setting aside.
13
Albert Jan van den Berg, “Should the Setting Aside of the Arbitral Award be Abolished?”(2014) 29(2) ICSID Review 1. (He argues that the Model Law allows two bites
at the same cherry in the country of origin).
14
Harisankar K.S., “Second Look at the Foreign Award forbidden on Enforcement - Indian Supreme Court”, Kluwer Arbitration Blog, August 1, 2013, http:/
/kluwerarbitrationblog.com/blog/2013/08/01/second-look-at-the-foreign-award-forbidden-on-enforcement-indian-supreme-court [Accessed May 13, 2015].
15
For, e.g. Shri Lal Mahal Ltd v Progetto Grano Spa 2013 (3) Arb.LR 1 (India) and AJU v AJT [2011] SGCA 41 (Singapore).
16
Maxi Scherer, “Effects of Foreign Judgments Relating to International Arbitral Awards: Is the ‘Judgment Route’ the Wrong Road?” (2013) 4(3) Journal of International
Dispute Settlement 587.
17
Article V(i)(e): “The award … has been set aside … by a competent authority of the country in which … the award was made.”
18
See, van den Berg, “Enforcement of arbitral awards annulled in Russia” (2010) 27(2) Journal of International Arbitration 179, 182.
19
See, Malicorp Ltd v Egypt [2015] EWHC 361 (Comm); [2015] 1 Lloyd’s Rep. 423.

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 Annulment versus Enforcement of International Arbitral Awards 49

brings back the principle of recognition and enforcement
of foreign judgments into the spotlight as opposed to the
recognition and enforcement of foreign arbitral awards.20
Secondly, the delocalisation approach, where the
national courts are ready to enforce an award irrespective
of the fact that it has been annulled at the seat of
arbitration. Some of the pro-arbitration judicial systems
have interpreted the term may in art.v(1)(e) as an “option”
to enforce annulled arbitral awards.21 In Putrabali decision
the French Supreme Court ruled thus22:
“An international arbitral award, which does not
belong to any state legal system, is an international
decision of justice and its validity must be examined
according to the applicable rules of the country
where its recognition and enforcement are sought.”
Jan Paulsson steadfastly supports a liberal approach in
exercising this residual discretion of a foreign
enforcement court.23 He argues that, an enforcement court
should refuse to recognise an award only if it has been
set aside at the country of origin in accordance with an
“international standard annulment”.24 Emmanuel Gaillard
also favours this approach, and argues that
“it is not exclusively the legal order of the seat of
arbitration but rather the sum of all of the legal
orders that are willing to recognise the arbitral
award, if not transnational rules, that lend the arbitral
award its legal authority.”25
Accordingly, an enforcement court may deviate from the
annulment decision made at the place of arbitration.
Perhaps a better response to this debate is to view this
provision as a balancing act between the competing
theories of localisation and delocalisation, done by the
New York Convention.
Interestingly, this debate is limited to a situation in
which the court at the place of arbitration sets aside the
award, and the possible consequences of that decision.
However, there are two other possibilities at the seat of
arbitration, i.e. when the unsuccessful party opts not to
challenge the award or when the court at the place of
arbitration decides not to set aside the award. The
following discussion would attempt to bring some light
on the consequence of these two circumstances.
3. Doctrine of issue estoppel
In the English common law system, issue estoppel is
regarded as a species of a genus known as the doctrine
of res judicata.26 The purposes behind issue estoppel are
fairness and judicial economy: “reaching a final
conclusion provides repose for the individuals,
consistency and finality for the legal system, and
conservation of judicial resources.”27 In a dissenting
opinion in Chorzow Factory case, the Permanent Court
of International Justice mentioned res judicata as one of
the “general principles of law recognised by civilised
nations”.28 It can take two different forms, namely “cause
of action estoppel” and “issue estoppel”, which means
that there could be estoppel in relation to the entire claim
or a discrete issue. There is a general consensus with
respect to the pre-requisites of the application of issue
estoppel, which is commonly referred to as the
“triple-identity” test. As the name suggests, the
requirement calls for identity of: (i) things claimed; (ii)
legal grounds; and (iii) parties. However, notwithstanding
this general consensus regarding the broad contours of
the doctrine and its firm position as a principle of
international law, there is little agreement regarding how
it is to be administered.29 In a famous Canadian judgment
concerning the application of res judicata the court makes
a pitch for taking great caution in the application of this
doctrine:
“Generally speaking, the authorities require
fastidious adherence to the constituent elements of
res judicata in order to permit its application.
However, even where the requisite ingredients are
present, the court retains a residual discretion to
decline to apply it if doing so would cause unfairness
in the particular case.”30
3.1 Supervisory jurisdiction, foreign
enforcement and issue estoppel
Now, for the purposes of this paper, the real question is
whether the annulment decision by a supervisory court
meet the requirement that calls for the application of issue
estoppel by an enforcement court. In other words, are the
New York Convention enforcement courts bound to
follow the decisions of the courts of supervisory

20
Patricia Zivkovic, “Enforcement of an Award Set Aside: the So-Called “Preferred Approach” and its Application under English Law”, Kluwer Arbitration Blog, April
8, 2015, http://kluwerarbitrationblog.com/blog/2015/04/08/enforcement-of-an-award-set-aside-the-so-called-preferred-approach-and-its-application-under-english-law
/comment-page-1/ [Accessed May 13, 2015].
21
For, e.g. see Société Hilmarton Ltd v Société OTV (Cour de cassation France, 23 March 1994) YB Comm Arb, Vol.XX (1995) 663 and Chromalloy Aeroservices Inc v
Arab Republic of Egypt (District Court of District of Columbia, 31 July 1996) YB Comm Arb, Vol XXII (1997) 1001.
22
See, PT Putrabali Adyamulia v SA Rena Holdings June 29, 2007 Cour de cassation France.
23
Jan Paulsson, “Arbitration Unbound: Award Detached from the Law of its Country of Origin” (1981) 30 International and Comparative Law Quarterly 358.
24
Jan Paulsson, “Enforcing Arbitral Awards Notwithstanding a Local Standard Annulment (LSA)” (1998) 9(1) ICC International Court of Arbitration Bulletin 14.
25
Emmanual Gaillard, “The Enforcement of Awards Set Aside in the Country of Origin” (1999) 14 ICSID Review 16.
26
See, Halsbury’s Laws of England, 4th edn (London: Butterworths), Vol.16, p.1030. “Issue estoppel is a species of res judicata. It applies where an issue in a cause of
action was decided in a previous action. It must be a finding that is fundamental to the outcome of the decision, so fundamental that if a different conclusion had been
reached on the issue, the outcome would have been different. If such is the case, then this issue cannot be raised in subsequent litigation.”
27
See, Montana v United States 440 U.S. 147, 153 (1979) cited in Sabrina M. Sudol, “The U.N. Convention on the Recognition and Enforcement of Foreign Arbitral Awards
and Issue Preclusion: A Traditional Collateral Estoppel Determination” (2004) 65 University of Pittsburgh Law Review 931, 933.
28
See, Interpretation of Judgments Nos 7 & 8 Concerning the Case of the Factory at Chorzow 1927 PCIJ (Ser A) No.11 at 27 (dissenting opinion of Judge Anzilotti) quoted
in International Law Association, Interim Report: Res judicata and Arbitration (2004), Berlin Conference, p.18.
29
Pedro J. Martinez-Fraga and Harout Jack Samra, “The Role of Precedent in Defining Res Judicata in Investor-State Arbitration” (2012) 32 Northwestern Journal of
International Law & Business 3.
30
See, Ballance J in Tylon Steepe Homes Ltd v Pont 2011 BCSC 385 at [54].

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50 International Arbitration Law Review

jurisdiction? As discussed earlier, it is a well-established demonstrates the aforementioned probabilities. Refusal

fact that annulment and enforcement of arbitral awards
differ significantly as to the standard of review as well
as burden of proof. Thus, the issue may not be deemed
identical where there is a difference in the forums in
which the two actions are to be determined or where the
standard of proof varies.31 The International Law
Association report (2004) on “res judicata and arbitration”
suggests that later proceedings may be brought and the
case can be re-litigated if a party chooses to take a second
shot and attempts to bring its case based on a different
cause of action.32 In essence, despite the usage of identical
grounds for annulment and refusal of enforcement in
national arbitration law and New York Convention, issues
cannot be treated as identical as both actions require
different standards of review.
Essentially, there are three possible outcomes that
entail an award review stage in the place of arbitration.
One, the award debtor may opt not to challenge the award;
second, the challenge may fail; and thirdly, the challenge
succeeds and the award is set aside. In any case, it is
obvious that the award creditor would try to get the award
enforced in any of the jurisdiction where the losing party
has assets. So, let us consider the applicability of issue
estoppel by an enforcement court in all the three potential
situations. In the first case, the court may apply issue
estoppel on the reason that the award debtor could have
raised the ground which they did not, thereby waiving
the option. In the second situation, the enforcement court
may decline the refusal of enforcement on the ground
that the same issue—ground for the refusal of
enforcement—cannot be re-litigated. The main claim of
this paper is concerned with these two set of
circumstances, which will be discussed in detail below.
In the third situation, the New York Convention court
may refuse enforcement by interpreting art.V(i)(e), which
has been discussed earlier.33 Here there is no question of
application of issue estoppel.34 First, because the
enforcement court is not specifically concerned with the
reason for setting aside, rather they respect the judgment
of the supervisory court as a matter of comity35; and
secondly, the enforcement court that follow a
transnational (delocalised) approach would reject the
specific ground on which the award was set aside, rather
they respect the award itself as a matter of international
justice.36 Further, the requirement of proof under art.V
of enforcement is possible only if the defendant proves
any of the grounds, including art.v(1)(e).37 Thus, if the
award debtor is prevented from raising the issue, the
award may be enforced. If he is not precluded from raising
it, the enforcement may be refused.
3.2 Issue estoppel and New York
Convention
New York Convention in and of itself does not allow the
application of issue estoppel when an award debtor tries
to resist enforcement in a court other than the supervisory
jurisdiction.
“If a country wishes to apply rules of preclusion, it
may do so on the basis of the more favourable right
provisions under art VII(1) of the New York
Convention. However, in doing so, the country in
question places itself outside the New York
Convention and develops a domestic (case) law on
the enforcement of foreign arbitral awards. It is an
increasingly frequent misconception that a court may
apply at the same the time the Convention and more
favourable provisions of domestic arbitration law
as if the case were an instance of enforcement under
the Convention. Such a conflation of legal bases is
not permitted by the Convention: the basis for
enforcement is either the Convention or domestic
law on the enforcement of foreign arbitral awards.”38
What will happen to enforcement of an award in a foreign
country if the validity of it has been confirmed by the
supervisory court? This situation is possible, as mentioned
earlier, either because the award debtor did not challenge
the award, or setting aside proceedings failed at the seat
of arbitration. An oft cited example of such a course of
action is Dallah v Pakistan,39 which shows that refusal
of enforcement is possible despite the failure of setting
aside action at the country of origin. However, this is not
a perfect example which would help an award debtor in
resisting the enforcement under such situation. In Dallah,
the judgment from the supervisory jurisdiction (France)
came only after the decision of non-enforcement in a
foreign court (England).40 In an opposite scenario the
English court declined to refuse the enforcement of

31
See Sudol, “The U.N. Convention on the Recognition and Enforcement of Foreign Arbitral Awards and Issue Preclusion: A Traditional Collateral Estoppel Determination”
(2004) 65 University of Pittsburgh Law Review 931, 944, quoting US federal court decisions, Clark v Bear Stearns & Co 966 F.2d 1318 (9th Cir. 1992) and Norrell Health
Care Inc v Clayton 168 B.R. 700 (Bankr. N.D. Ca. 1994).
32
See International Law Association, Interim Report: Res judicata and Arbitration, p.16
33
See Pt 2.2.
34
It is obvious because there is no specific “issue” to be precluded, as the gound “has been set aside” cannot be an issue for the court at the seat of arbitration. See fn.12
above.
35
This is the position taken by courts that follow a territorialist approach. See, Malicorp [2015] EWHC 361 (Comm); [2015] 1 Lloyd’s Rep. 423; also see, Scherer, “Effects
of Foreign Judgments Relating to International Arbitral Awards: Is the ‘Judgment Route’ the Wrong Road?” (2013) 4(3) Journal of International Dispute Settlement 587.
36
See, Putrabali June 29, 2007 Cour de cassation France; also see Jan Paulsson, “Enforcing Arbitral Awards Notwithstanding a Local Standard Annulment (LSA)” (1998)
9(1) ICC International Court of Arbitration Bulletin 14.
37
Burden is on the defendant, inter alia, to prove that the court at the place of arbitration has set aside the award.
38
See, van den Berg, “Should the Setting Aside of the Arbitral Award be Abolished?” (2014) 29 ICSID Review 1, 9.
39
Dallah Real Estate & Tourism Holding Co v Pakistan [2010] UKSC 46; [2011] 1 A.C. 763.
40
For more details about the case, see, Jacob Grierson, Mireille Taok, “Dallah: Conflicting Judgments from the U.K. Supreme Court and the Paris Cour d’Appel” (2011)
28(4) Journal of International Arbitration 407; and George A. Bermann, “The UK Supreme Court Speaks to International Arbitration: Learning from the Dallah Case”
(2011) 22 Am. Rev. Int’l Arb. 1.

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 Annulment versus Enforcement of International Arbitral Awards 51

foreign award, citing the reasons of comity.41 Here the
pretext of the enforcement court could be issue estoppel,
as the award debtor had invoked the same issue during a
setting aside proceeding. At the cost of repetition, it is
important to note that such issue preclusion is not
contemplated in New York Convention. Moreover, the
fact that art.VI of the New York Convention allows a
foreign court to adjourn its decision on enforcement
demonstrate that the convention rejects application of
issue estoppel.42 Another important aspect of issue
estoppel could arise when there was no application to set
aside the award at the first instance (seat of arbitration).
Is an application to set aside at the country of origin a
condition precedent to the resistance of enforcement in
a foreign jurisdiction? A bare reading of the New York
Convention will provide an answer in the negative. It is
important to mention that under the Model Law an
application to set aside an award can be made anytime
within three months from the date of receipt of the
award.43 Therefore, a foreign court cannot make it an
obligation for the award-debtor to start setting aside action
before invoking the grounds under the New York
Convention for the refusal of enforcement.44 European
courts are cognisant of the illogic of estoppel in
addressing both the lack of setting aside application and
dismissal of the application. The German Supreme Court
denied the enforcement of a foreign award for the lack
of competence of the tribunal, even when there was no
attempt to challenge the award at the place of arbitration.45
Similarly, the Spanish Supreme Court denied the
enforcement of a foreign (French) award on the basis that
writing requirements of the agreement were not satisfied.46
Thus, even if the supervisory court were to find that the
arbitration agreement is valid under the lex arbitri,
enforcement could be refused under the New York
Convention.47
4. Recent judicial approaches in the
application of issue estoppel
Despite the absence of an express or implied provision
for issue estoppel under the New York Convention, the
common law courts have (mis)applied this doctrine on
many occasions and enforced the awards to the
predicament of an unsuccessful party in an international
commercial arbitration.
4.1 Interaction between supervisory and
enforcement courts
The Federal Court of Australia in Gujarat NRE Coke Ltd
v Coeclerici Asia (Pte) Ltd,48 applied issue estoppel and
declined the refusal of enforcement of a foreign (London)
award. A challenge was made before the English court
on the same grounds which were subsequently relied on
by the award debtor before the enforcement court
(Australia). Although the Australian court did not deal
with the doctrinal question of administering issue estoppel
at enforcement stage, they took the view that the principle
of international comity ushers the enforcement court to
follow the decision of the supervisory court on the same
issue. Nevertheless the court attempted to make a
compromise in dealing with situations where the
supervisory court decides outrageously. The court opined
that the award debtor may get a second chance only in
“exceptional circumstances”, based on an English
decision.49 The Chief Justice (who presided over the
Gujarat case) is of the view that the enforcement court
should “develop a broad and flexible approach to the
weight to be given to the views of other courts, including
the court of the seat.”50 According to him
“… this will involve a fresh look at comity and the
need for courts to be willing, on proper evidence
with the necessary degree of cogency, to examine
the reliability and quality of justice in other
jurisdictions.”51
4.2. Alternative or cumulative?
In a Hong Kong case, it was held that:
“He (award debtor) may decide to take the initiative
and challenge the award; or he may decide to do
nothing but to resist any attempts by his adversary
to obtain recognition and enforcement of the award.
The choice is a clear one—to act or not to act.”52

41
Minmetals Germany GmbH v Ferco Steel Ltd [1999] 1 All E.R. (Comm) 315; According to Colman J, “normally … a very strong policy consideration before the English
courts that it has been conclusively determined by the courts of the agreed supervisory jurisdiction that the award should stand”.
42
Article VI: “If an application for the setting aside or suspension of the award has been made to a competent authority referred to in article V(1)(e), the authority before
which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party
claiming enforcement of the award, order the other party to give suitable security.”
43
See, art.34(3) of the Model Law.
44
See, van den Berg, “Should the Setting Aside of the Arbitral Award be Abolished?” (2014) 29 ICSID Review 1, 8. Previously, under some national laws governing the
enforcement of foreign awards outside New York Convention, it was a mandatory pre-condition that the award debtor must have tried the annulment procedure at the country
of origin. In Germany the Arbitration Law prior to 1998 contained such a provision. See, ZPO (Zivilprozessordnung) s.1044(2)(1). Germany changed its position in 1998.
However, in 2006, the German Court of Appeal, enforced the award, holding that the respondent was estopped from invoking the grounds for refusal of enforcement set
forth in the New York Convention because the respondent had not timely applied for the setting aside of the award at the seat (Switzerland). See, Claimant v Respondent ,
Obelandesgericht [Court of Appeal] Karlsruhe, 9 Sch 01/06 (July 3, 2006); (2007) 32 YB Com Arb 358.
45
See fn.44 above. French Seller v German Buyer November 23, 2009 Oberlandesgericht Munich and French Seller v German Buyer December 16, 2010 Bundesgerichtshof;
(2011) 36 YB Com Arb 273.
46
See, Actival Internacional SA v Conservas El Pilar SA Y.B. Comm. Arb. XXVII (2002) 528–532.
47
See, art.V(1)(a) of New York Convention.
48
Gujarat NRE Coke Ltd v Coeclerici Asia (Pte) Ltd [2013] FCAFC 109.
49
See Colman J in Minmetals Germany GmbH v Ferco Steel Ltd [1999] 1 All E.R. (Comm) 315 at 331, see fn.41.
50
James Allsop, “The Authority of the Arbitrator” (October 29, 2013) Clayton Utz Sydney of University International Arbitration Lecture, http://www.claytonutz.com
/ialecture/2013/speech_2013.html#_ftn1 [Accessed May 13, 2015].
51
Allsop, “The Authority of the Arbitrator”, see, Albert Monichino SC & Alex Fawke, Enforcement of Foreign Arbitral Awards, Issue Estoppel and Comity: Developments
in Australia, Asian Dispute Review (January 2014), p.13.
52
Kaplan J, Paklito Investment Ltd v Klockner East Asia Ltd [1993] 2 HKLR 39 at [49] (quoting Redfern and Hunter on International Commercial Arbitration, p.474).

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52 International Arbitration Law Review

Later, the Hong Kong Court of Final Appeal observed 4.4. Effect of prior enforcement judgment
that on New York Convention court
“a party may be precluded by his failure to raise a Similarly, and most importantly, enforcement court in
point before the court of supervisory jurisdiction one country have applied issue estoppel with respect to
from raising that point before the court of a prior enforcement court’s decision in another country
enforcement. This is because failure to raise such a as opposed to a court at the seat of arbitration. Here it is
point may amount to an estoppel or a want of bona worthwile to quote Prof van den Berg again:
fides such as to justify the court of enforcement in
enforcing an award.”53 “The effect that a setting aside in the country of
origin has in other countries, ie, a bar to
The Singapore High Court has taken an analogous enforcement, is not the same for a refusal of
approach and held that the losing party should not be enforcement in the country of origin. Such a refusal
allowed to have “two bites at the cherry” as the rights in the country of origin is not a ground for refusal
before annulment and enforcement forums are alternative, of enforcement abroad under the New York
not cumulative.54 The court took the very same stance in Convention.”61
Galsworthy55 and held that an unsuccessful party seeking
remedies against an arbitral award had the “alternative Logically, any national court decision, either to grant or
and not cumulative options” of applying to challenge the refuse the enforcement of an award, shall have no effect
award, or, defending the enforcement of the same. in any other court considering enforcement of the same
According to the judge, the award debtor was not eligible award. So, re-framing our crucial question: Is an
to resist the enforcement proceedings because it had enforcement court bound to follow the decision of an
“elected” to proceed in the English court (supervisory earlier enforcement court under New York Convention?
jurisdiction) and, therefore, the application in the In a recent decision in Diag Human Se v Czech
Singapore High Court amounted to “an abuse of Republic,62 the English commercial court have prevented
process.”56 the claimant (award creditor) to enforce an award based
on a previous decision of the Austrian Supreme Court
4.3. Choice of remedies refusing to enforce the award rendered in Czech Republic.
To my knowledge, this is the first case where a national
Singapore Court of Appeal in 2013 considered this issue court under New York Convention has applied the
in a different context. In PT First Media TBK v Astro doctrine of issue estoppel to refuse the enforcement of
Nusantara International BV,57 the court analysed the an award. Here, Eder J decided that there is no concept
active remedy of setting aside an award and the passive of the application of issue estoppel under the convention.
remedy of resisting the enforcement. According to the Perhaps the judge relied on the illuminating international
Singapore International Arbitration Act, a distinction is law principle that permits the court to exercise jurisdiction
drawn between an international award rendered by a in the absence of a prohibitive rule.63 It is very important
tribunal seated in Singapore and an award rendered in a to note that the grounds mentioned under art.V of New
foreign jurisdiction.58 In this case, the High Court earlier York Convention are exhaustive. Besides this controversy,
held that since the place of arbitration was Singapore, the whether the convention allows the administration of issue
losing party had no choice of resisting the enforcement estoppel, it is important to bear in mind that both
as provided under art.V of the New York Convention.59 proceedings in this context are related to enforcement
Reversing the High Court Decision, the Court of Appeal under the convention, which could be treated as a
took the view that choosing Singapore as the seat of “distinction without a difference.”
arbitration would not deprive a party of its choice of Another recent instance of issue estoppel in relation
remedies against an arbitral award.60 to back-to-back enforcement proceedings is enumerated
in an English decision in Yukos Capital SARL v OJSC
Rosneft Oil Co.64 Here the claimant obtained arbitral
awards against the defendant which were subsequently
53
See, Aloe Vera of America, Inc v Asianic Food (S) Pte Ltd [2006] SGHC 78 at [56] (quoting Sir Anthony Mason NPJ in Hebei Import & Export Corp v Polytek Engineering
Co Ltd [1999] 2 HKC 205).
54
Newspeed International Ltd v Citus Trading Pte Ltd [2003] 3 SLR 1; see, Lawrence BOO, Enforcement of Foreign Awards: A Suggestion for an ASEAN Protocol on
Enforcement of Awards, http://www.aseanlawassociation.org/10GAdocs/Singapore6.pdf [Accessed May 13, 2015].
55
See, Galsworthy Ltd of the Republic of Liberia v Glory of Wealth Shipping Pte Ltd [2010] SGHC 304.
56
Darius Chan, Options available to an unsuccessful party in an arbitration, Transnational Notes (August 5, 2011), http://blogs.law.nyu.edu/transnational/2011/08/options
-available-to-an-unsuccessful-party-in-an-arbitration/ [Accessed May 13, 2015].
57
PT First Media TBK v Astro Nusantara International BV [2013] SGCA 57.
58
See, Nakul Dewan, “To “Seat” or not to “Seat”: Art Thou Relevant!!” Article, Singapore International Arbitration Centre, http://www.siac.org.sg/2013-09-18-01-57-20
/2013-09-22-00-27-02/articles/326 [Accessed May 13, 2015].
59
Dewan, “To “Seat” or not to “Seat”: Art Thou Relevant!!” The High Court’s view was founded on the Inetrnational Arbitration Act having excluded Ch.VIII of the Model
Law, which sets out the grounds for refusing recognition or enforcement of an award.
60
PT First Media TBK [2013] SGCA 57 at [90].
61
See, van den Berg, “Should the Setting Aside of the Arbitral Award be Abolished?” (2014) 29 ICSID Review 1, 8.
62
Diag Human Se v Czech Republic [2014] EWHC 1639 (Comm).
63
The Case of the S.S. Lotus (France v Turkey) September 7, 1927, http://www.icj-cij.org/pcij/serie_A/A_10/30_Lotus_Arret.pdf [Accessed May 13, 2015].
64
Yukos Capital SARL v OJSC Rosneft Oil Co [2014] EWHC 2188 (Comm); [2014] 2 Lloyd’s Rep. 435.

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 Annulment versus Enforcement of International Arbitral Awards 53
annulled at the seat of arbitration, Russia. Despite this
Amsterdam Court of Appeal, which follows a delocalised
approach, upheld the enforcement of these awards in
favour of Yukos. In a subsequent enforcement proceeding
in England, the commercial court denied enforcement of
the award, showing allegiance to the territorial approach
in refusing the enforcement of an annulled award.
Interestingly, the court prudently denied the application
of issue estoppel on the ground that English public policy
cannot be equated with Dutch public policy.
5. Concluding remarks
The pronouncement of the Australian Federal Court
commenting, “it would generally be inappropriate for an
enforcement court applying the New York Convention
to reach a different conclusion from the court at the seat
of the arbitration”,65 is difficult to approve. An
unsuccessful party in an arbitration has a choice of
remedies; he can apply to set aside the award at the seat,
whilst at the same time, resist enforcement in another
jurisdiction. The view that post award remedies available
at the seat of arbitration and at a (foreign) enforcement
court are alternative rights, would render the
corresponding provisions in Model Law and New York
Convention superfluous. The enforcement court under
the New York Convention is not a forum to enforce the
award judgment, but a forum to consider the enforcement
of an international arbitral award itself.66
Despite the “pro-enforcement bias”, New York
Convention does not provide for an automatic issue
estoppel in enforcement proceedings. Furthermore, the
65
Coeclerici Asia (Pte) Ltd v Gujarat NRE Coke Ltd [2013] FCA 882 at 103.
66
See, Scherer, “Effects of Foreign Judgments Relating to International Arbitral Awards: Is the ‘Judgment Route’ the Wrong Road?” (2013) 4(3) Journal of International
Dispute Settlement 587.
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usage of words only if in art.V directs the court to reject
the application of issue estoppel, otherwise, the defendant
would be left with no chance to prove his case. It is also
worth mentioning that, according to art.VI of the New
York Convention an enforcement court may order a stay
of proceedings if setting aside proceedings are pending
before the supervisory court. From the standpoint of the
New York convention, it is untenable to say that an
enforcement court could disrespect the decision setting
aside an award, but cannot do so if the decision is not to
set aside the award.
In other words, a national court applying the New
York convention is not required to be a “rubber stamp”
and enforce all the awards that comes before it. Moreover,
a technical application of issue estoppel requires the
examination of pleadings and evidence in the setting aside
level, which I think, goes against basic cornerstones of
New York convention. The whole purpose of providing
separate grounds for resisting the enforcement is to give
a “second bite at the cherry”. Therefore, using a tool
which is not contemplated in the New York convention
to sabotage the right afforded to a losing party would be
legally untenable. If a judicial discretion is possible to
overlook an annulment decision, a same kind of discretion
allows in pretermitting issue estoppel. In sum, no doubt,
there are sensible reasons for the application of the legal
doctrine of issue estoppel; however, a blind application
of this principle would be legally inappropriate and should
be avoided. Otherwise, this would undermine the
ambitions of upholding international arbitration as a
delocalised or transnational legal order.