Arbitragem – Ideias fundamentais

 Arbitragem = uma das técnicas de « ADR »

 outras incluem eg mediação, conciliação, determinação pericial

 Há ainda formas informais de « contract governance »: in cross-
border contracts, creditors often do not even try state courts (or not
even arbitration), and use e.g. monitoring + reputation
management.

 Sometimes « dispute escalation clauses » or « multi-tier

(arbitration) (dispute resolution) clauses »: first negotiation, then
mediation/conciliation, or a third party advice, then litigation
(arbitration or courts)
 E.g. in art. 20 FIDIC Red Book: first determination by the Engineer, then a « Dispute
Adjudication Board » (DAB), then ICC Arbitration; eg World bank standard forms; eg
NEC4 (New Engineering Contract version 4)
 Such a clause is binding, may lead to invalidity of next step if earlier not made (eg
Swiss BG 16 March 2016)
 Arbitration - general
 Types of arbitration:
- Arbitration based on international public law, eg ICSID (supra)
- Arbitration based on national law, this chapter
- Denationalised arbitration does not really exist.

 Double nature :
- On the one hand on a contractual basis (more correctly 2 contracts:
1° between the parties and 2°with the arbitrator(s))
- On the other hand jurisdictional as to:
its procedure (procedure is analogous to judicial procedure), and
its effects:
1° impact: normal judge has lack of jurisdiction;
2° the arbitral decision is a jurisdictional decision (res iudicata) and
not merely a contractually binding decision even if not enforceable
yet (auctoritas, not yet potestas)
 (National) arbitration statutes

 Where arbitration is «based» upon national law (esp. rules on

judicial organisation and procedure):

> the national law of the « place of arbitration » contains the

conflict rules

> which refer to the applicable national law on (aspects of)

arbitration (to be distinguished from the question of the law
applicable to the case itself)
 (National) arbitration statutes
 Topics of (national) arbitration statutes are:
1) the conflict of law rule and
2) substantive rules, such as rules concerning
- the arbitration agreement,
- the arbitrability (disputes capable of being settled by arbitration),
- the arbitral procedure,
- the supervision by (national) courts,
- the effects of the award (recognition, enforcement),
- the annulment of the award.

 Sometimes separate rules for domestic and transnational arbitration

(eg Switzerland; Australia: International Arbitration Act 2010;
French case law identifying a French substantive international law of
arbitration, Cass. 30 III 2004 in Unikod)
 Harmonisation of arbitration
statutes ?
Partial harmonisation of the arbitration statutes (successful Uncitral
model law ICL 1985, revised 2006, incorporated in many national
statutes, in 26 EU MS at least in part, in 13 in full, further i.a. Australia,
in total at least 80 states)

National statutes e.g.: in Belgium in Judiciary Code (revised 2013); in

NL in the CCP art. 1020 ff. (since 1-1-2015); in France in CPC; UK
Arbitration Act 1996; in the US Federal Arbitration Act (FAA) 1925,
OHADA uniform Arbitration Act, etc.
Often inspired by the Uncitral model law

Treatieson recognition and enforcement abroad – see the NY

Convention 1958 (successful) (predecessor: Geneva Convention
1923/1927)
 Arbitration – (dis)advantages
 Reasons for arbitration – advantages and disadvantages
 Flexibility of procedure >< uncertainty
 Parties can choose seat, number of arbitrators, language, division of costs
 Confidentiality (no public character of procedure)
 Higher costs for a single instance (arbitratrors to be paid) >< Single
instance, in principle no appeal, usually quicker (not always)
 In jurisdictions with class actions: avoid class actions
 Arbitrators usually more specialised than judges in the type of dispute
 Internationally easier to obtain recognition and enforcement than for
foreign judgments (success of NY Convention, infra)
 Not every type of relief can be granted by arbitrators
 Not automatically enforceable
 Difficult to oblige third parties to join (but if linked contracts also provide for
arbitration, arbitration may be easier) and no injunctions against third
parties (eg to produce documents)
 Arbitration –
questions of contract law

 Possible issues (on following slides):

- Formation (offer & acceptance), interpretation
- Validity and invalidity as a contract
- Legal capacity of the parties to conclude such an agreement
- Arbitrability of the issues to be settled (i.e.: can the issue be settled
by arbitration ?)
 law applicable to arbitration
agreement – formation & validity
 The formation and validity of the arbitration agreement are in
principle determined by the lex contractus (proper law) of the
arbitration agreement, also called lex arbitri

 but conflict law in CH & NL is more favorable: it is sufficient that it is

valid according to the law chosen or the law of the seat of
arbitration or, absent choice of law, the lex causae (law regulating
the merits)
 Law applicable to arbitration
agreement – formation & validity
 Conflict rule for the lex arbitri? In most places of arbitration
(countries) the conflict rule is:
> 1° choice of law (express or implied),
> 2° (subsidiary) place of arbitration (lex fori) or closest
connection (chosen seat being an important element – EWCA in
Sulamerica, 2012) (in Belgium Rome-I is applied ‘overshootingly’,
except where national law has a special conflict rule)
> Q. whether a choice of law of the contract in general is also an
implied choice of law for that arbitration agreement.

 The lex arbitri (lex contractus) of an arbitration clause in a wider

agreement is determined separately from the lex contractus of the
contract of which it is a part
 Arbitration contract –
formation
 What do most applicable laws/statutes (lex arbitri) provide?

 The arbitration agreement (agreement which obliges the parties to

use arbitration in case of dispute and makes the future award
binding for the parties):
- can be a separate agreement (ad hoc),
- or a clause in a wider agreement.
(art. 7 (1) Model law)

In case of several agreement between the parties, some containing

arbitration clauses, courts may apply an ‘umbrella agreement test’
(is there an ‘umbrella agreement’ that contains the clause)
 Arbitration agreement
– formation & validity

 Separability:

 The formation and validity of the arbitration agreement must be judged

separately from that of the contract it is part of (autonomy or separability of
the arbitration clause) (cfr. French Cass. 7 May 1963 Gosset or SC US 1967
in Prima Paint v Flood & Conklin; in the UK S.6 Arbitration Act and E&WCA
2012 in Fiona Trust v. Privalov). Comp. Art. 16 (1) Model law.
 Effect: where the clause is valid, only the arbitrator decides the validity of
the rest of the contract
 Where one element of the arbitration clause is invalid, the rest of the clause
remains valid (eg arbitration clause specifying an arbitral forum that does
not exist)
 Arbitration agreement – formation &
validity
 What do most applicable statutes (lex arbitri) provide? Invalidities ?

 No or only few specific rules; the rules of general contract law on formation
and validity normally apply (Implied consent by a third party in Cass.Fr. 26
Oct. 2011 CMN / Fagerdala). Often a writing reguirement (flexible, art. 7 (2
ff.) Model law)

 Sometimes invalidity of unilateral optional arbitration clauses (eg Russia;

California Appeal Court 19 March 2013 Compton; comp. for forum clauses
Cass.(Fr.) 26 Sep 2012 v. 7 Oct. 2015; but deemed valid in Belgium, UK,
Germany, Italy, Spain)

 Consumer law: next slide:

 Some specific rules, e.g. validity of agreement for arbitration of disputes

governed by « overriding mandatory provisions »: discussed after
arbitrability
 Arbitration agreement – formation &
validity: consumers
 Validity of arbitration agreement with a consumer ?
- In EU in general arbitration clauses not per se invalid (in concreto
evaluation whether unfair or not)
- Belgium: as such not unfair
- France: presumption of unfairness in domestic contracts, valid in international contracts
(Cass. 1997 in Renault/V2000)
- England: unfair for small claims (below 5000 £)
- Austria: only if concluded after dispute has arisen
- New ADR Directive 11/2013 art.10: consumer has always the right to take
the initiative to go to Court; business must inform consumer about ADR
possibilities
 US law:
- no invalidity of arbitration clauses (SC in 2011 and 2013)
- no invalidity of arbitration clauses in labour contracts excluding collective
actions (SC 21 May 2018, Epic systems)
 Some specific rules, e.g. validity of agreement for arbitration of disputes
governed by « overriding mandatory provisions »: discussed after
arbitrability
 Arbitration agreement – formation &
validity: sports
 ECHR 2 Oct 2018 in Pechstein / Switzerland on obligatory arbitration for all
disputes concerning sport by professional sporters (jursdiction of the C.A.S
= T.A.S.):

 Clause is qualified as forced arbitration.

 Effect: arbitratron procedure must meet all the requirements of fair trail
under art. 6 1 6 ECHR (which is not the case for truly voluntary arbitration),
including a public hearing (transparency)
 Arbitration agreement - capacity
 Conflict rule:
Often (but not in common law) a separate conflict rule as to the law
applicable to the legal capacity of the parties, referring to the
« personal law » of each party

 What do most applicable statutes decide as to the capacity required

for an arbitration agreement ? (also called arbitrability ratione
personae)

- In principle the same restrictions on capacity as in the case of a

settlement agreement (eg minors, insolvent party, ...);
- Sometimes additional restrictions on the capacity for arbitration
agreements, such as restrictions to authority granted to agents,
directors, receivers (in bankruptcy), public agencies, etc... to
dispose of the rights at stake
 Arbitration agreement – arbitrability
 Conflict rule as to the issue of arbitrability (ratione materiae):

 often a cumulative conflict rule leading to more than one law

applicable. Enforcement may require:
- arbitrability under the law of the place of arbitration;
- arbitrability under the law applicable to the issue to be settled (lex
causae)
- arbitrability under the law of the country of enforcement.
see art. V.2.a. NY Convention.
 Less cumulative is art. VI ECICA (only lex contractus arbitri, and
own law of the country refusing recognition)
 E.g. Belgian conflict rule (as stated in Cass. 16 Nov 2006 Van
Hopplynus, and Cass. 14 Jan. 2010 Sebastian) refers to the
application of the Belgian law on arbitrability in all disputes where
the Belgian courts have jurisdiction
 Arbitrability and public policy
 Arbitrability may be limited in matters governed by rules of public
order, but in general
1° a dispute is arbitrable even if rules of public policy apply;
2° the arbitrators may and must apply rules of public policy that are
relevant for the dispute (e.g. a party invokes that a contract is void
because contrary to competition law), and
3° the judicial control takes place a posteriori.
Comp.:
- Cass. B. 2 Feb. 1973
- ECJ in Eco Swiss / Benetton (1999): competition law is part of the
public policy exception in exequatur procedures (a posteriori
control)
- SC.US in Mitsubishi Motors v. Soler Chrysler-Plymouth (1985):
arbitrable
 However, the arbitration agreement may nevertheless be invalid
(see next slide) (maybe better to tackle the problem not merely a
posteriori?)
 Arbitrability & overriding mandatory law
 Arbitration of disputes governed by «overriding mandatory provisions »: ex
ante control or ex post ? (comp. discussion on forum clauses) ?
 Applications: labour law, some consumer contracts, rules protecting
distributors or commercial agents

 Case law in B, Austria, Italy, Germany: ex ante control: where parties can
waiver their right only after the dispute has arisen, they cannot on
beforehand be bound to arbitration, unless the arbitrators are required to
apply these mandatory provisions irrespective of the otherwise applicable
law.
- > traditional Belgian case law: ‘conditional arbitrability’: disputes concerning
termination of distributorship or commercial agency on Belgian territory
(Belgian Distributorship Act 1961 and Commercial Agency Act 1995) are not
arbitrable unless requiring the arbitrators to apply these provisions of
national law (Cass. 28 June 1979 & Cass. 14 Jan 2010 distributorship; Cass.
3 nov 2011 agency).
- > discussion whether still the case under new Arbitration Act 2013, art.
1676 Belgian Jud.C. Lower courts have accepted arbitrability in principle
(subject to control a posteriori)
 Arbitrability & overriding mandatory law
 Arbitration of disputes governed by «overriding mandatory
provisions »:
- Comp. German case law, OLG München 17 May 2006 (likely danger
that foreign tribunal will not apply the mandatory provision;
arbitration clause combined w/ choice of foreign law is presumption
of likeliness). BGH 5 Sep 2012 (Virginia agency case, forum clause
in agency contract)
- Comp. English High Court in Accentuate (2009) and in Fern
Computers (2014)
- In Austrian OGH 1 March 2017 (T Gmbh /O Inc.), there was already
a partial arbitral award (New York state); the arbitration clause with
a choice of law referring to NY law was deemed invalid.

 As within the EU, forum clauses cannot be set aside in eg

distribution contracts cases, a subsidiary forum clause could help.
 Arbitration – who judges the validity ?
 Who judges the validity and scope of the arbitration agreement ?

 1. The nominated arbitrator(s)

The nominated arbitrator has in principle jurisdiction over the questions of:
validity of the arbitration agreement, legal capacity to refer to arbitration,
and arbitrability (‘provisional’ competence-competence - but subject to a
possible annulment of the award by the court of the place of arbitration).
Comp. Art. 16 Model law

Also jurisdiction over the interpretation of the arbitration agreement – whether

the dispute or action is covered by the arbitration agreement. Cfr. SCotUS
10th June 2013, Oxford v. Sutter «The arbitrator's construction holds,
however good, bad, or ugly»; Swiss BG 9 Nov 2015 (not questioning
decision on the facts of the arbitrator).

 2. The otherwise competent national court (next slide)

 Arbitration – who judges the validity ?
 Who judges the validity and scope of the arbitration agreement ?

 The otherwise competent* national court has also jurisdiction to judge the
validity of an arbitration agreement invoked (as ‘exceptio arbitrandi’) by a
party to deny the jurisdiction of that court**, but not always to question an
arbitral decision on the facts on which it bases jurisdiction.
 Some countries give also a « negative effect » to the competence-
competence, suspending any judgment on the validity until there is an
arbitral award, unless the arbitration agreement is manifestly/prima facie
invalid (e.g. Swiss interpretation of art. 178 Swiss PIL; French case law
interpreting art. 1448 CCP: Cass. 7 June 2006, Tag Heuer case; Portugal;
Malaysia)

• * (to this competence, Brussels-I does not apply)

• ** American law to some extent accepts that also this competence can be
« delegated » to the arbitrators by a ‘delegation clause’

 The party contesting the validity has no obligation to participate in the

proceedings (« Dallah »-principle, UKSC 2010)
Effects of a valid arbitration agreement
 Effects of a (valid) arbitration agreement:
- arbitrators have jurisdiction over the dispute referred to arbitration
- every other judge lacks jurisdiction. This has to be invoked « in
limine litis » (art. 16 Model law)
- within the substantive scope of the arbitration agreement, it’s up
to a second arbitrator to judge whether an earlier arbitral award has
res iudicata concerning the new claim (in the US: Belco-rule, 2d Cir
1996)
- the court of the place of jurisdiction has certain powers in relation
to arbitration proceedings in that place (infra). The law of that place
may provide the possibility of an anti-suit injunction prohibiting the
other party to pursue court proceedings instead of arbitration (eg
UK SC 2013 in Ust-Kamenogorsk) (but not against proceedings
before courts in the EU, ECJ in West Tankers)
- provisional measures: next slide
Effects of a valid arbitration agreement
– provisional measures
 Arbitral tribunal normally has power to grant interim measures (art.
17 ff. Model law)
 Courts may still take provisional and protective measures (summary
proceedings)*,** (art. 17J Model law)
 Parties may still take protective measures (e.g. conservatory
seizure) – after permission of the state judge where such permission
is required*

• * Insofar as there is no Emergency Arbitrator appointed with this

task (cfr. New ICC rules); in Dutch law: only insofar as arbitrator is
not able to do it (or not timely)

• ** Eg art. 44 UK Arbitration Act; In the new Belgian Act, art. 1691

Jud.C.: concurrent jurisdiction arbitrator/courts
 Effects of a valid arbitration agreement

 Effects of a (valid) arbitration agreement (cont.)

 Effects for successors ?

- assignee will normally be bound (see Ch. assignment)
- administrator in bankruptcy in principle bound (eg
Belgium), but not necessarily always (eg a case under
Polish law accepted by the Swiss SBG 31 March 2009)
Arbitration agreement - content
Possible content of an arbitration agreement:

 Definition of the disputes covered by arbitration

- often restrictive interpretation of arbitration clauses:
- Clarify whether arbitrator has authority to decide on costs
to be borne by the losing party

 Possible reference to the procedural rules of an

Arbitration Institute:
(next slides)
 Arbitration institutions
Possible reference to procedural rules - (1) of an Arbitration Institute:
- Specialised (sector specific) international arbitration institutions (e.g.
commodity arbitrations (eg by GAFTA, Grain and Feed Trade
Association), WIPO arbitration center (IP), T.A.S. = C.A.S Lausanne for
Sports; ARIAS (Insurance and Reinsurance arbitration society UK); LMA
(London Maritime Association)
- General international arbitration institute: ICC has a Court of
Arbitration that supervises arbitral proceedings (intervenes in
nominations, payment of costs, control of formal validity of award,
respect for time schedule); Since 2016, ICC publishes composition of
arbitral tribunals (more transparency)
- Common Court of OHADA at Abidjan is also a « Court of Arbitration »
in the same sense as the ICC
- National arbitration institutions and similar: next slide
- the PCA (Permanent Court of Arbitration) in The Hague (NL), an
international organisation specialised in disputes of public international
law (s. infra)
 Arbitration institutions
- National arbitration institutions and similar, main institutions:
 LCIA (London Court of international arbitration)(an English company)
 CIETAC (China international Economic and Trade Arbitration Commission)
 Swiss Chambers’ Arbitration Institution (Swiss rules)
 SCC (Stockholm Chamber of Commerce)
 Paris Arbitration Rules
 VIAC (Vienna International Arbitral Centre)
 Cepina (Belgium)
 AAA (American Arbitration Association) and its International Centre for Dispute Resolution (ICDR)
 DIAC (Dubai International Arbitration Centre)
 DIS (German Institution of Arbitration)
 KLRCA (Kuala Lumpur Regional Centre for Arbitration)
 MKAS (Moscow International Commercial Arbitration Court)
 SIAC (Singapore International Arbitration Centre)
 CEAC (Chinese European Arbitration Centre Hamburg)
 HKIAC Hongkong
Most important seats: London, Paris, Hongkong, Singapore, Geneva, Stockholm, N York.
 Arbitration agreement - content
Possible reference to procedural rules (2)
- In case of ad hoc arbitration, parties have to regulate these matters
themselves in the agreement (supplemented by default rules of the
arbitration statute)

- Intermediate solution: arbitration according to the UNCITRAL

Arbitration rules (version 1976 revised 2010): detailed rules, eg also
possibility of nominating ad hoc an « appointing authority ». Since
2010, the PCA (Permanent Court of Arbitration) is the indirect
appointing authority by default, i.e. will appoint the appointing
authority if parties have not agreed upon one (art. 6 Uncitral)
-The PCA also has its own rules for cases where a state or international
organisation is involved (consolidated in the PCA Arbitration rules
2012) (dealing more in detail also with issues of international public
law)
 Place of arbitration
 Determination of the place of arbitration (seat).
 The seat is a legal notion: it links the arbitration procedure to a
specific country (but does not oblige the arbitrators to conduct procedures
there; not necessarily the venue of hearings – comp. 20(2) Model law).
 Relevance:
- determines which court is competent to supervise the arbitration, for
challenges to arbitrators, to decide an action for annulment of the award,
etc. («juge d’appui») (the court will refuse to help if it deems the arbitration
against its international public order)
- determines the conflict of law rules indicating the law applicable to the
arbitration;
- provides the default procedural rules (infra); but arbitrator not bound if
not mandatory;
- localises the arbitral award (this will eg determine whether it is localised in
a country that has ratified a Treaty on recognition and enforcement of
arbitral awards). Art. V(1)(A) NY Convention requires the award to comply
with the law of the country where it was made
Arbitration agreement – content

 Determination of the number of arbitrators (in many countries must

be uneven)
 Possibly rules on challenging impartiality (unless left to the court),
eg in the ICC rules within 30 days since obtaining the information
 Choice of the language(s) of the procedure (language of the
submissions; may be relevant also for evidence) (see also art. 22
Model law)
 Choice of the law applicable to the arbitration agreement (supra)
 (NB. Choice of the substantive law to be applied to the dispute, but
this is strictly speaking not part of the arbitration agreement itself)
 Arbitration – appointment arbitrators
 Appointment of the arbitrators
 Number: default rule is 3 (art. 10 Model law)
 If 3 arbitrators, usually one nominated by each party, the 3rd (« umpire ») is either
nominated by both of them together or by the arbitration institute (comp. Art. 11 (1)
Model law)

 Multi-party arbitration: Uncitral has specific rules on appointment (also some national
statutes do and some rules of arbitration institutions); also specific rules in the LCIA
Rules;

 Acceptance by the arbitrator(s): requires independence and impartiality; duty to

disclose possible conflicts of interests*. Possible « challenge » of an arbitrator (art.
12 ff Model law).
* Art. 1686 Belgian Jud.C; esp. in case of « repeat arbitration: Cass.Fr. 20 Oct. 2010 X
v. Prodim & Logidis
• See IBA Guidelines on Conflict of Interest in Internat. Arbitration (revised 2014), and
the broader approach of the ICC Guidance on Conflict Disclosure by Arbitrators
(2016)
• Since 1 Jan 2016, ICC publishes the appointments of arbitrators
But parties must challenge shortly after obtaining the information that would allow an
objection: Cass. Fr. 17 June 2017, Orange / Guinée Equitoriale
 Arbitration – conduct of proceedings
 Agreement on fees & expensens arbitrators (in case of institutional
arbitration: under supervision of the Institution)

 Possible arrangements at the start of proceedings, often in « terms of

reference »:
- definition of the dispute and the claims of the parties (esp. a « Statement
of claim »)
- establishment of a timetable / calendar
- possible appointment of an administrative secretary (see ICC note
1995/2012)
- manner in which parties will present their arguments, disclose documents,
present evidence*, etc.
* As to taking evidence, parties could refer to the IBA-Rules on taking evidence
(1999, revised 2010) (compromise between continental and American
traditions). According to Art. 17 Model law, the arbitral tribunal may require
disclosure. A more continental model are the « Prague rules » 2018

 If not already in the terms of reference, possible « case management

conference » (required in new ICC rules)
 Arbitration – conduct of proceedings
 Some rules have an ‘early determination’ procedure (eg Singapore
IAC rule 29 if manifestly outside jurisdiction or without merits), or
an « Expedited procedure » for smaller claims (ICC rules 2016: sole
arbitrator; rules apply by default under 2 mio USD, unless parties
explicitly opt for standard procedure)

 Under most arbitration laws, a defense of lack of jurisdiction must

be raised in limine litis (comp. Model law art. 16 (2))
 Arbitration
law applicable to the procedure
 Procedural rules (incl. rules on supervision by state court)

 Law applicable to the procedure ? (also called lex curiae)

- Law indicated by the conflict rule of the place of arbitration; conflict
rule usually refers to the lex fori, i.e. rules of the place of
arbitration. Arbitrator may deviate if not mandatory.
- Some countries have separate procedural rules for international
arbitration or refer to such rules, eg when the ECICA is ratified
(European Convention on International Commercial Arbitration,
Geneva 1961, 31 ratifications incl. 11 EU member states,
paneuropean)

- Some Institutions have in their rules also detailed guidelines on the

conduct of the parties’ representatives (e.g. LCIA rules 2014)
 Arbitration
– procedural rules
 Procedural rules determine:

 the basic rules for the proceedings (classical rules such as adversary
character, possibility to decide in absentia (by default), whether partial
awards possible, whether dissenting opinions may be made public, duty to
motivate award, notification of the award, ...)

 the rules on taking evidence and on valuation of proof. Arbitrators may

apppoint experts (art. 26 Model law). If expert examination is required, the
ICC Rules for Experts may help (deal with proposal of experts by ICC,
appointment rules, administration rules)

 Whether curia novit ius or law has to be invoked (and possibly proven) by
the parties

 Next slide …
 Arbitration
– procedural rules
 Procedural rules may determine in which cases the state court can help /
intervene
E.g. parties can ask a court order where the arbitrator has no authority, eg
for an Actio ad exhibendum against a 3rd party (order to produce
documents)*
E.g. replacement of arbitrator(s)
See also Art. IV ECICA on remaining jurisdiction of courts in relation to
arbitration

* The request may be within the jurisdiction of the courts of the place of
arbitration
• If not, the question arises how to seize a ‘foreign’ court having jurisdiction
over that evidence. See Ch. 11 on taking evidence abroad. Question
whether arbitrator or arbitrating parties can directly go to the foreign court
or not – depends on the rules of jurisdiction in that country. E.g. in the US
foreign litigants can directly request such a court order on the basis of S.
1782 USC (now usually accepted that this is also possible in case of foreign
arbitration). Idem art. 27 Model law.
 Arbitration
– the award
 The award must be:
- signed by the arbitrators, at least by a majority (art. 31 (1) Model
law)
- stating reasons (motivated) (art. 31 (2) Model law)

 In case of institutional arbitration, the Institution may have the

power to check the award as to its form (scrutiny), not substance
(eg ICC rules art. 27)

 Some countries require the award to be filed (deposited) in court

 Challenging the arbitral award
 In principle no appeal (unless agreed) (34(1) Model law); some arbitration
rules provide an optional appellate procedure (eg new AAA rules)

 Challenging in court – action for annulment according to the rules of the

place of arbitration (seat)
 In most countries only limited grounds for annulment: no valid arbitration
agreement, no fair trial (incl. arbitrator not independent*), award ultra
petita (for Belgium, see art. 1717 § 3 Jud.C (version 2013); for the UK S.
67 Arbitration Act, etc.). Comp. Art. 34(2) Model law.
* Eg Cassation (Fr) 20 Oct. 2010, Somoclest v. DV construction.
An error of law is not an excess of power (eg UK HL 2005 in Lesotho
Highlands)
However, where the arbitration rules themselves contain a procedure to
challenge impartiality, that must be followed first: Cass.F. 25 June 2014 in
Avax/Tecnimont
 In some countries annulment can be excluded contractually if none of the
parties is domestic (CH, B, Sweden) (rare in practice)
 Usually short time periods (art. 34(3) Model law: 3 months)
 Challenging the arbitral award

 Effect of setting aside ? : same arbitrators, new arbitrators, state

court ?

 > In principle the case has to be settled by a new arbitration

procedure.
 Arbitration – domestic
enforcement
 Enforcement in the country of the award: exequatur can be
obtained in simplified proceedings:
- on unilateral request (without notice procedure)
- merely a « marginal control » of the substance
E.g. S. 66 Arbitration Act (Engl & W)

 Third party involvement can simplify enforcement (third party

holding the money in dispute)
 Arbitration – enforcement
abroad

 Enforcement abroad can take place alternatively on the basis of

- the NY Convention 1958 (159 member states in 2018)
- national law
- any other convention
Arbitration – enforcement
NY Convention (159)
 Arbitration – enforcement
abroad
 Enforcement on the basis of the NY Convention:

 In member states of that Convention (159 in 2018; missing i.a.

Taiwan, Iraq)

 Sphere of application: territorial or non-domestic test in art. 1

> Eg Chinese Supreme Court 18 Dec 2013 refused Korea arbitral
award between 2 Chinese companies related to a joint venture in
China

 Only arbitral awards, eg no international commercial settlement

agreements resulting from conciliation (UNCITRALis developing an
instrument on recognition and enforceability of ICSA’s).
 Arbitration – enforcement
abroad
 Enforcement on the basis of the NY Convention 1958 in member
states of that Convention:

 Simplified proceedings (additional exequatur of the state of the

place of arbitration is not required, only exequatur in the state of
enforcement)

 National law determines whether appeal is possible against the

decision on exequatur, and if appeal suspends enforceability or not.

 NB. Cases on NY Convention published in Yearbooks Commercial

Arbitration.
 Arbitration enforcement abroad
 NY Convention
 Art. 5 - only limited grounds for refusal (exceptions), esp.:
- (1a) Lack of capacity of a party
- (1a) Invalidity of the arbitration agreement according to the lex
contractus)
- (1c) Jurisdiction exceeded (ultra petita)
- (2a) Arbitrability of the dispute is excluded by the lex contractus,
the lex fori of the place of arbitration or the lex fori of the place of
enforcement
- (2b) Contrary to public policy of receiving country

 Esp. the public policy exception is widely used by some countries,

eg Russia – practice statements of the Supreme Arbitrazh Court
(new version 2013, Information Letter no. 156)
 The ILA issued a recommendation to restrict the public policy
exception (ILA recommendation on public policy 2002)
 Arbitration – enforcement
abroad
 The NY Convention is not exclusive (art. VII.1), enforcement can
also be asked (and take place) on the basis of :
- ECICA (more restricted list of grounds for setting aside award)
- other multilateral conventions,
- bilateral conventions, eg the 1925 Belgian-Dutch jurisdiction and
enforcement convention also covers arbitral decisions
- possibly national law
- > Choice to be made by the defendant (clearly, otherwise NY
Convention applies) and ‘in toto’ (no cherry-picking)

 Enforcement despite annullment in the country of the seat ?

Exceptionally accepted by English Court in Yukos / Rosneft (2014)
Art. 5 NYC states that in such case recognition « may » be refused
(Court in country of enforcement has to judge whether it recognises
the annulment)