(9) grounds for resisting enforcement (Ground 6 – non-arbitrable (Art 36…
(9) grounds for resisting enforcement
7 grounds for resisting enforcement
Contained in Art 36 ML, Art V.1 NYC
Permissive, not mandatory (i.e. Court
refuse enforcement) = same issue as in "set aside" enforcement - does ct have discretion to refuse to resist E even tho a ground is made out. YES. In some circumstances, ct can exercise discretion and enforce award.
Overridden by more favourable multilateral or bilateral agreements between states – Art VII NYC. i.e. a higher treaty … A7 is known as the most favourable right provision. NYC does nt weaken that higher treaty.
1 Invalidity of the arbitration agreement
Art 36.1(a)(i) ML; Art V(1)(a) NYC
“a party to the arbitration agreement… was 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.”
-Almost the same as Art 34: setting aside the award
In practice, cases decided of application for setting aside award can provide good parallels for resisting E
2 – lack of due process
Art 36.1(a)(ii) ML; Art V(1)(b) NYC
“the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present his case.”
Does not apply where difficulties were self-induced by award debtor – see Cukurova Holding v Sonera Holding  UKPC 15 (PC, UK} - v useful case. Reported wrongful termination. Lord Clarke looks at party's entitlement and what tribunal has to do. Generally in liti, same as arbitration.. Must reason decision but it doesn't mean arbi award has to traverse each and every submission. Clarke says whether T's reasoning is justified or not is not the business of the ct. just as long as a reasoning has been given, it is entitled to enforcement.; Kanoria v Guiness  EWCA Civ 222 (CA, Eng).
Ground 3 – exceeds scope of arbitration agreement
Art 36.1(a)(iii) ML; Art V.1.c NYC
“the award deals with a dispute 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 the arbitration can be separated from those not submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced.”
If arbis goes beyond remit (and considers things that are beyond the scope), then it has no legal fact = not an award. May not be able to carve it out. The part of the award that can be preserved remains
Can be PARTIAL resisting of the award.
Ground 4 – Irregular composition of the tribunal or procedure
Art 36.1(a)(iv) ML; Art V.1.d NYC
“the composition of the arbitral tribunal 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”
Ground 5 – not binding or already set aside by courts of seat
Art 36.1(a)(v) ML; Art V.1.e NYC
“the award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which, or under the law of which, that award was made”
Now, 2 courts r capable of setting aside the award. 1) in the country the award was made 2) under the law it was made (lex arbitri)
There was a debate raging in arbi circles for sometimes if this created the possibility of suspending / setting aside award other than the one of the court of seat. This would give rise to the problem of forum shopping. (duplicity of litigation). This happened in Karaha bodas.
N.B. confirmation by the courts of the seat is not required (abolition of double exequatur)
Set aside must be by the courts of the seat: see Karaha Bodas Co Llc v Perusahaan Pertambangan Minyak Du Gas Bumi Negara, 364 F3d 274 (5th Cir, 2004) (Swiss award ‘set aside’ by Indonesian court; enforcement in US).
indo cy tried in swiss ct, then indo went to indo ct. the law of arbitration was indo law, the seat of switz but lex is indo (this is what indo said). Indo cy persuaded indo ct to set aside. They then told the texas ct its been done by indo ct under ground 5. texas said wtf
Are there 2 cts u can apply to set aside? Problem w language in article. NO there isn't. the only ct u can apply to is the ct of the seat. Reasoning: what indo ct did was atrocious.
Held: ground 5 means CT OF SEAT. And no other ct.
Ground 6 – non-arbitrable
Art 36.1(b)(i) ML; Art V.2.a NYC
“the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State” this state = enforcing state
As oppopsed to where the award was made. For the first time: If not arbitrable (under the court of the law tasked w enforcement), it could refuse to enfroce it even if it’s a under law of seat.
This is a nod to the international reality that it would be q offensive to require ct of state to enforce arbi in awards that by their very nature are not regarded as arbitrable. Arbitrability. What is/not arbitrable is a policy one. Fr a long time, competition law disputes + insolvency issues + fam + criminal law are not arbitrable , driven by policy rules.
Effectively states do not have to enforce arbitral awards in matters not arbitrable under their laws (but award still capable of enforcement elsewhere).
Brings a tactical dimention to arbitrators. When u r arbitrating a dispute, u need to have an eye to where u may enforce an award. Theres no point going throuhg a process if u dk if u cannot enforce. This involves looking at laws of target jurisdiction.
Ground 7 – contrary to public policy
Art 36.1(b)(ii) ML; Art V.2.b NYC
”The recognition or enforcement of the award would be contrary to the public policy of this State.” - sharing parallel w 6. it is the law of the state. A nod to the international sentiment that it would be wrong to req cts of particular country to enforce award that contravenes their policy.
Mirrored in A36 (public policy) for setting aside award. Tough threshold.
Public policy has same meaning as in applications to set aside awards: see AJU v AJT  SGCA 41 (CA, Sing) - more of a setting aside than an enforcement.
One party complained the other comitted fraud. Prior to its civil complaint, told thai police and made them open up a criminal case. Parties said they wanted to settle (conclusion agreement. ) then AJT said they dw stand by this bc its invalid. Bc facilitating sth contrary to public policy: stifling criminal investigation. AJT sought to avail itself of the taint of illegality. Arbi tribunal said the settlement agreement is fine and not contrasting public policy. Challenge went to sg high ct. sg said: yes it is grounds for setting aside award. In turn, CA in SG went the other way: tribunal was right, it does not reach high threshold of being so contrary to public policy that its enforcement ought to be refused. = it must be v severe to make out this ground.