«ICCA’S GUIDE TO THE INTERPRETATION OF THE 1958 NEW YORK CONVENTION: A HANDBOOK FOR JUDGES INTERNATIONAL COUNCIL FOR COMMERCIAL ARBITRATION ICCA’S ...»
Once a petitioner has submitted the documents as defined in Article IV, it is entitled to the recognition and enforcement of the award unless the respondent proves that one or more grounds for refusal of recognition and enforcement of the award as exhaustively set forth in
1. Canada: Supreme Court of Canada, 20 May 2010 (Yugraneft Corporation v. Rexx Management Corporation) Yearbook Commercial Arbitration XXXV (2010) pp. 343Canada no. 31).
Article V(1) apply or the court finds one of the grounds in Article V(2) to be applicable.
The general rule to be followed by the courts is that the grounds for refusal defined in Article V are to be construed narrowly, which means that their existence is accepted in serious cases only. This is especially true with respect to claims of violation of public policy, which are often raised by disappointed parties but very seldom accepted by the courts.
For example, although London is one of the great financial centres of the world where parties often seek enforcement, there is no recorded case of an English court ever rejecting a foreign award on the grounds of public policy (see this Chapter below at V.2).
As of 2010 the ICCA Yearbook Commercial Arbitration in its thirty-five years of reporting on the Convention has found that only in ten per cent of the cases recognition and enforcement has been refused on Convention grounds although this percentage has slightly increased in recent years.
Courts approach enforcement under the New York Convention with – a strong pro-enforcement bias and – a pragmatic, flexible and non-formalistic approach.
This commendable liberal attitude fully exploits the potential of this most successful treaty, to which 145 States are party, to serve and promote international trade (see the Overview at I.2).
II. PHASE I – REQUIREMENTS TO BE FULFILLED BYPETITIONER (ART. IV) At this phase of the proceedings, the petitioner has the burden of proof and has the duty to submit documents as listed in the New York Convention (Article IV). The petitioner only has to submit prima facie
evidence. Phase I is controlled by a pro-enforcement bias and practical mindset of the enforcement court.
II.1. WHICH DOCUMENTS?
When reviewing a request for recognition and/or enforcement of the award, courts verify that the petitioner has submitted at the time of the
– The duly authenticated original award or a duly certified copy thereof (Article IV(1)(a));
– The original agreement referred to in Article II or a duly certified copy thereof (Article IV(1)(b)); and – Translations of these documents into the language of the country in which the award is relied upon, where relevant (Article IV(2)).
II.2. AUTHENTICATED AWARD OR CERTIFIED COPY (Article IV(1)(a)) II.2.1. Authentication The authentication of an award is the process by which the signatures on it are confirmed as genuine by a competent authority. The purpose of the authentication of the original award or a certified copy of the award is to confirm that it is the authentic text and has been made by the appointed arbitrators. It is extremely unusual that this poses any problem in practice.
The Convention does not specify the law governing the authentication requirement. Nor does it indicate whether the authentication requirements are those of the country where the award was rendered or those of the country where recognition or enforcement is sought. Most courts appear to accept any form of authentication in 72 ICCA Guide to the NYC
REQUEST FOR THE RECOGNITION AND ENFORCEMENT OF AN ARBITRAL AWARDaccordance with the law of either jurisdiction. The Austrian Supreme Court, in an early decision, expressly recognized that the authentication can be made either under the law of the country where the award was made or under the law of the country where the enforcement of the award is sought.2 Other enforcement courts apply their own law.3 The Austrian Supreme Court more recently recognized that “the New York Convention does not explain clearly whether only the authenticity or accuracy requirements in the State of rendition of the award apply to the arbitral award and the arbitration agreement or to their copies, or whether also the requirements for the certification of foreign documents in the recognition State must be complied with”
and concluded that
“the Supreme Court consistently supports the... opinion that the Austrian certification requirements do not apply exclusively.... [T]he Supreme Court accordingly deemed that certifications according to the law of the State in which the arbitral award was rendered suffice....”4 The documents merely aim at proving the authenticity of the award and the fact that the award was made on the basis of an arbitration agreement defined in the Convention. For this reason, German courts hold that
2. See, e.g., Austria: Oberster Gerichtshof, 11 June 1969 (Parties not indicated) Yearbook Commercial Arbitration II (1977) p. 232 (Austria no. 3).
3. See, e.g., Italy: Corte di Cassazione, 14 March 1995, no. 2919 (SODIME – Società Distillerie Meridionali v. Schuurmans & Van Ginneken BV) Yearbook Commercial Arbitration XXI (1996) pp. 607-609 (Italy no. 140).
4. Austria: Oberster Gerichtshof, 3 September 2008 (O Limited, et al. v. C Limited) Yearbook Commercial Arbitration XXXIV (2009) pp. 409-417 (Austria no. 20).
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CHAPTER IIIauthentication is not required when the authenticity of the award is not disputed: see, e.g., two recent decisions of the Munich Court of Appeal.5 There have only been a few cases where a party has failed to satisfy these simple procedural requirements (e.g., in a 2003 case before the Spanish Supreme Court, the petitioner supplied only uncertified and non-authenticated copies of the award).6 Courts may not require a party to submit any additional documents or use the procedural requirements as an obstacle to an application by interpreting them strictly.
The purpose of a certification is to confirm that the copy of the award is identical to the original. The Convention does not specify the law governing the certification procedure, which is generally deemed to be governed by the lex fori.
The categories of persons authorized to certify the copy will usually be the same as the categories of persons who are authorized to authenticate an original award. In addition, certification by the SecretaryGeneral of the arbitral institution that managed the arbitration is considered sufficient in most cases.
5. Germany: Oberlandesgericht, Munich, 17 December 2008 (Seller v. German Assignee) Yearbook Commercial Arbitration XXXV (2010) pp. 359-361 (Germany no. 125) and Oberlandesgericht, Munich, 27 February 2009 (Carrier v. German Customer) Yearbook Commercial Arbitration XXXV (2010) pp. 365-366 (Germany no. 127).
6. Spain: Tribunal Supremo, Civil Chamber, Plenary Session, 1 April 2003 (Satico Shipping Company Limited v. Maderas Iglesias) Yearbook XXXII (2007) pp. 582-590 (Spain no. 57).
This provision merely requires that the party seeking enforcement supply a document that is prima facie a valid arbitration agreement. At this stage the court need not consider whether the agreement is “in writing” as provided by Article II(2) (see Chapter II at IV.2) or is valid under the applicable law.7 The substantive examination of the validity of the arbitration agreement and its compliance with Article II(2) of the Convention takes place during phase II of the recognition or enforcement proceedings (see this Chapter below at IV.1, Article V(1)(a)).
Courts in countries where the national law does not require the petitioner to supply the original arbitration agreement or a certified copy may dispense with this requirement altogether in application of the more-favourable-right principle in Article VII of the Convention (see Chapter I at V.1). This is the case of German courts, which consistently hold that petitioners seeking enforcement of a foreign award in Germany under the Convention need only supply the authenticated original arbitral award or a certified copy.8
7. See, e.g., Singapore: Supreme Court of Singapore, High Court, 10 May 2006 (Aloe Vera of America, Inc v. Asianic Food (S) Pte Ltd and Another) Yearbook Commercial Arbitration XXXII (2007) pp. 489-506 (Singapore no. 5).
8. See for a recent example, Germany: Oberlandesgericht, Munich, 12 October 2009 (Swedish Seller v. German Buyer) Yearbook Commercial Arbitration XXXV (2010) pp.
383-385 (Germany no. 134).
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II.4. AT THE TIME OF THE APPLICATION
If the documents are not submitted at the time of application, courts generally allow parties to cure this defect in the course of the enforcement proceedings.9 Italian courts, however, consider that the submission of the documents is a prerequisite for commencing the recognition or enforcement proceedings and that if this condition is not met, the request will be declared inadmissible. The Italian Supreme Court has consistently held that the original arbitration agreement or a certified copy thereof must be supplied at the time of filing the request for enforcement of an award; if not, the request is not admissible. This defect can be cured by filing a new application for enforcement.10
II.5. (Article IV(2)) TRANSLATIONS
The party seeking recognition and enforcement of an award must produce a translation of the award and original arbitration agreement referred to in Article IV(1)(a) and (b) if they are not made in an official language of the country in which recognition and enforcement are being sought (Article IV(2)).
Courts tend to adopt a pragmatic approach. While the Convention does not expressly state that the translations must be produced at the
9. See, e.g., Spain: Tribunal Supremo, 6 April 1989 (Sea Traders SA v. Participaciones, Proyectos y Estudios SA) Yearbook XXI (1996) pp. 676-677 (Spain no. 27);
Austria: Oberster Gerichtshof, 17 November 1965 (Party from F.R. Germany v. Party from Austria) Yearbook Commercial Arbitration I (1976) p. 182 (Austria no. 1).
10. See for a recent example, Italy: Corte di Cassazione, First Civil Chamber, 23 July 2009, no. 17291 (Microware s.r.l. in liquidation v. Indicia Diagnostics S.A.) Yearbook Commercial Arbitration XXXV (2010) pp. 418-419 (Italy no. 182).
time of making the application for recognition and enforcement, a number of State courts have, however, required translation to be submitted at the time of making an application.
Examples of cases where a translation was not required are:
– The President of the District Court of Amsterdam considered no translation of the award and arbitration agreement to be necessary because these documents were “drawn up in the English language which language we master sufficiently to have taken full cognizance thereof”.11 – The Zurich Court of Appeal held that there is no need to supply a translation of the entire contract containing the arbitration clause; a translation of the part containing the arbitration clause suffices. Note that construction contracts may be 1,000 pages with annexes.12
Examples of cases where a translation was required are:
– The Argentinian Federal Court of Appeals determined that a translation made by a private – rather than official or sworn – translator who was also not licensed to act in the Province where the enforcement proceeding was held did not satisfy the Convention’s requirements.13
11. Netherlands: President, Rechtbank, Amsterdam, 12 July 1984 (SPP (Middle East) Ltd.
v. The Arab Republic of Egypt) Yearbook Commercial Arbitration X (1985) pp. 487Netherlands no. 10).
12. Switzerland: Bezirksgericht, Zurich, 14 February 2003 and Obergericht, Zurich, 17 July 2003 (Italian party v. Swiss company) Yearbook Commercial Arbitration XXIX (2004) pp. 819-833 (Switzerland no. 37).
13. Argentina: Cámara Federal de Apelaciones, City of Mar del Plata, 4 December 2009 (Far Eastern Shipping Company v. Arhenpez S.A. ) Yearbook Commercial Arbitration XXXV (2010) pp. 318-320 (Argentina no. 3).
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CHAPTER III– The Austrian Supreme Court considered a case where the petitioner only supplied a translation of the dispositive section of the ICC award. It determined that the case should be remitted to the Court of First Instance to which the application for enforcement had been made so that this defect could be cured.14
This phase is characterized by the following general principles:
– no review on the merits;
– burden on respondent of proving the exhaustive grounds;
– exhaustive grounds for refusal of recognition and enforcement;
– narrow interpretation of the grounds for refusal;
– limited discretionary power to grant the recognition and enforcement even if one of the grounds applies.
III.1. NO REVIEW ON THE MERITS
The court does not have the authority to substitute its decision on the merits for the decision of the arbitral tribunal even if the arbitrators have made an erroneous decision of fact or law.
The Convention does not allow for a de facto appeal on procedural issues; rather it provides grounds for refusal of recognition or enforcement only if the relevant authority finds that there has been a
14. Austria: Oberster Gerichtshof, 26 April 2006 (D SA v. W GmbH) Yearbook Commercial Arbitration XXXII (2007) pp. 259-265 (Austria no. 16).
violation of one or more of these grounds for refusal, many of which involve a serious due process violation.