Transcript STUDYING LAW AT ROME TRE INTERNATIONAL ARBITRATION …

STUDYING LAW AT ROMA TRE
FALL SEMESTER
INTERNATIONAL ARBITRATION
The New York Convention 1958
Domenico Di Pietro
11 November 2010
ARTICLE III
Each Contracting State shall recognize arbitral
awards as binding and enforce them in
accordance with the rules of procedure of the
territory where the award is relied upon, under
the conditions laid down in the following Articles.
There shall not be imposed substantially more
onerous conditions or higher fees or charges on
the recognition or enforcement of arbitral awards
to which this Convention applies than are
imposed on the recognition or enforcement of
domestic arbitral awards.
ARTICLE IV
1. To obtain the recognition and enforcement mentioned in
the preceding article, the party applying for recognition and
enforcement shall, at the time of application, supply:
a) The duly authenticated original award or a duly certified
copy thereof;
b) The original agreement referred to in Article 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.
RESISTING ENFORCEMENT
ARTICLE V(1)
1. Recognition and enforcement of the
award may be refused, at the request of
the party against whom it is invoked, only
if that party furnishes to the competent
authority where the recognition and
enforcement is sought, proof that: […]
RESISTING ENFORCEMENT
ARTICLE V(2)
2. Recognition and enforcement of an
arbitral award may also be refused if the
competent authority in the country where
recognition and enforcement is sought
finds that: […]
ARTICLE V: ANALYSIS
• Exhaustive list
• May – No obligation to refuse recognition
and enforcement
• Paragraph (1) and (2) work differently:
– (1) on party application and with relative
burden of proof
– (2) ex officio
ARTICLE V(1)(A)
1. Recognition and enforcement of the award may be
refused, at the request of the party against whom it is
invoked, only if that party furnishes to the competent
authority where the recognition and enforcement is
sought, proof that:
(a) The parties to the agreement referred to in article II
were, under the law applicable to them, under some
incapacity, or
the said agreement is not valid 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;
ARTICLE V(1)(A)
• Corte di Cassazione, 9 May 1996, No. 4342, Société Arabe des
Engrais Phosphates et Azotes – SAEPA v. Gemanco Srl
‘legal persons of public law may, unless the parties have explicitly
agreed otherwise, undoubtedly agree to arbitration, independent of
domestic prohibitions, by expressing their consent and sharing in the
international marketplace, the conditions common to all operators.’
• Administrative Tribunal of Damascus, 31 March 1988, Fougerolle
SA v. Ministry of Defence of the Syrian Arab Republic
The tribunal refused the enforcement of two arbitral awards against
the Syrian Ministry of Defence on the ground that the Syrian party
lacked the required capacity to submit to arbitration. Since the
arbitration clause was entered into without the preliminary advice of
the competent Committee of the Council of State, the awards were to
be considered as ‘non-existent’.
ARTICLE V(1)(B)
(b) The party against whom the award is
invoked was not given proper notice of
the appointment of the arbitrator or of the
arbitration proceedings or
was otherwise unable to present his
case; or
ARTICLE V(1)(B)
• United States District Court, District of Massachusetts,
28 December 1989, Sesostris S.A.E. v. Transportes
Navales S.A. and M/V Unamuno
• United States Court of Appeals, Seventh Circuit, 29
September 1997, No.96-400 Generica Limited v.
Pharmaceutical Basics Inc.
‘defence basically corresponds to the due process defence
that a party was not given the opportunity to be heard at a
meaningful time and in a meaningful manner (…)It is clear
that an arbitrator must provide a fundamentally fair hearing
(…). A fundamentally fair hearings is one that meets the
minimal requirements of fairness – adequate notice, a
hearing on the evidence and an impartial decision by the
arbitrator.’
ARTICLE V(1)(C)
(c) The award deals with a difference not
contemplated by or not falling within the terms
of the submission to arbitration, or
it contains decisions on matters beyond the
scope of the submission to arbitration,
provided that, if the decisions on matters
submitted to arbitration can be separated from
those not so submitted, that part of the award
which contains decisions on matters submitted
to arbitration may be recognized and enforced;
or
ARTICLE V(1)(C) cont.
• Extra petita
• Ultra Petita
• “Salvage” clause
ARTICLE V(1)(C)
• United States District Court, Southern District of Ohio, 9
June 1981, Fertilizer Corporation of India v. IDI
Management Inc.
The tribunal awarded a substantial sum of consequential
damages while the contract between the parties expressly
excluded this sort of damages. The award was nevertheless
enforced, the court relied on the justification of the award
made by the arbitral tribunal.
• Cereals of the Arab Republic of Syria v. SpA Simer
(Societe delle. Industrie Mercaniele di Rovereio)
Only part of the award was consistent with the mandate
given to the arbitral tribunal, thus ordered the enforcement of
that part. The court refused to enforce the remaining part of
the decision, which exceeded the tribunal’s jurisdiction.
ARTICLE V(1)(D)
(d) The composition of the arbitral
authority or
the arbitral procedure was not in
accordance with the agreement of the
parties, or, failing such agreement, was
not in accordance with the law of the
country where the arbitration took place; or
ARTICLE V(1)(D)
• Supreme Court of Hong Kong, High Ct., 13 July 1994,
China Nanhai Oil Joint Service Corp. Shenzhen Branch
v. Gee Tai Holdings Co.
The Court rejected an application aimed at refusing
enforcement even if the arbitration agreement provided for
arbitrators who were on the Beijing list, whereas they were
actually on the Shenzhen list. The tribunal was irregularly
constituted but, being the arbitrators on the CIETAC list and
having the parties opted for a CIETAC arbitration, the court
did not recognise this issue as sufficient to prevent
enforcement of the award. Additionally, the party was
estopped from invoking Article V(1)(d), since the objection
was not raised during the arbitration proceedings.
ARTICLE V(1)(E)
(e) The award has not yet become binding
on the parties, or
has been set aside or suspended by a
competent authority of the country in
which, or under the law of which, that
award was made.
ARTICLE V(1)(E)
• US District Court, Southern District of Ohio, 9 June 1981, Fertilizer
Corporation of India v. IDI Management Inc.
Although there might be still recourse to a court in the place of arbitration
to set aside the award as opposed to an appeal on the merits, this fact
does not prevent the award from being binding. Thus, the award would
be considered binding if no additional recourse is possible to another
arbitral tribunal.
• French Cour de Cassation, 23 March 1994, Hilmarton Ltd. V.
Omnium de Traitement et de Valorisation(OTV)
The award had been made and consequently set aside in Switzerland; it
was then enforced in France relying on the more favourable right
provision of Article VII of the Convention and Article 1502 of the French
Code of Civil Procedure which does not contain any ground for refusing
enforcement related to the setting aside of the award by a court in the
place of arbitration.
• US Court of Appeals, District of Columbia Circuit, Chromalloy
Aeroservice Inc. v. Arab Republic of Egypt
The award was enforced in the United States despite it had been made
and set aside in Egypt.
ARTICLE V(2)
2. Recognition and enforcement of an arbitral
award may also be refused if the competent
authority in the country where recognition and
enforcement is sought finds that:
(a) The subject matter of the difference is not
capable of settlement by arbitration under the
law of that country; or
(b) The recognition or enforcement of the award
would be contrary to the public policy of that
country.
PUBLIC POLICY
IN INTERNATIONAL ARBITRATION
• Which Public Policy?
- International Public Policy
- Domestic Public Policy
- International public policy under
domestic law
- Domestic lois de police
• Degree of Analysis
e.g. The English Court of Appeal in Soleymany
vs.Soleymany and Westacre
International
Domestic
with international element
Domestic
CUSTOMARY PUBLIC POLICY
Substantive
• Activities contra bonos mores
- piracy, terrorism, genocide, slavery, drug
trafficking, corruption (see OECD Convention)
• Pacta sunt servanda
• Good faith? Abuse of rights?
Procedural
• bias or partiality
• making of award induced or affected by fraud
“CODIFIED” PUBLIC POLICY
•
•
•
•
•
•
•
anti-trust laws (e.g. Article 81EC)
currency controls
price fixing rules
environmental protection laws
embargo, blockade, boycott
tax laws
consumer protection laws
ARTICLE V(2)(a)
• United States District Court, District of Massachusetts,
17 March 1987, Sonatrach v. Distrigas Corp.
The needs of international commerce require the States to
interfere as little as possible with international commercial
arbitration.
‘The expansion of American business and industry will
hardly be encouraged if, notwithstanding solemn contracts,
we insist on a parochial concept that all disputes must be
resolved under our laws and in our courts (…)We cannot
have trade and commerce in world markets and
international waters exclusively on our terms, governed by
our laws and resolved in our courts.’
ARTICLE V(2)(b)
• Parsons & Whittemore Overseas Co. V. Société
Générale de l’Industrie du Papier (RAKTA), 508 F.2d 969
(2d Cir. 1974)
‘(…)the Convention’s public policy defence should be
construed narrowly. Enforcement of foreign arbitral awards
may be denied on this basis only where enforcement would
violate the forum State’s most basic notions of morality and
justice.’